Walmart may be the biggest consumer experience in the world, but one thing you cannot buy there is a luxury jet fit for a king – or a United States president.
Donald Trump’s first official overseas tour, a cultural exchange of ideas and new friendships in the limitless opulence of the Middle East’s ruling class, had not even drawn to a close before he was forced to turn his mind to the dreary, pesky realities of high prices on American supermarket shelves.
“Groceries – we have a term, groceries, it’s an old term but it means basically what you are buying – food ... it’s pretty accurate but it’s an old-fashioned sound,” he said in Abu Dhabi.
“Groceries are down. Costs are down. First week they were hitting me with eggs were up 200 per cent. And now they are down to a number that is amazing; they are down 97 per cent from where they were. And everybody said you won’t have eggs for Easter. Well, everybody had eggs for Easter at a very reasonable price.”
Trump’s obsession with the word “groceries”, which he and he alone seems to consider antiquated and cute, has been one of the quirks of his second term in office. It’s an oblique reminder that this is a man who never walked through a supermarket aisle in his life.
But it is understandable that groceries are on his mind. On Thursday, Walmart, the kingpin of the US budget “grocery” experience for six decades, announced that it could not absorb the tariff costs imposed on imports from China.
“We will do our best to keep our prices as low as possible, but given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” chief executive Doug McMillon said.
“We’re positioned to manage the cost pressure from tariffs as well or better than anyone, but, even at the reduced levels, the higher tariffs will result in higher prices.”
Behind the politely worded warning is the most direct repudiation of the promise made by Trump and Republicans that the costs of the tariffs would be (magically) borne by exporter and importer.
And it contains a terrifying scenario for Republicans: other food chain stores following suit, leading to higher prices and plummeting consumer confidence – and ultimately, perhaps, the spectre of empty shelves in supermarkets.
Jamie Dimon, the JPMorgan Chase chief executive, also popped up on Thursday to repeat his warnings about the tariff damage initiating a recession.
In news that will further dampen the mood of the US president’s return from the land of golden palaces, the GOP is facing down an internal rebellion with three Republican members of the House Budget Committee indicating that they will vote against advancing Trump’s vision of one “big, beautiful Bill” which would usher through his key priorities on taxation, the border and the national debt.
For many people, the administration’s war on liberal academia and the judiciary are distant, abstract concerns. But 90 per cent of Americans live within 16km of a Walmart. It employs 1 per cent of the US workforce. What began as a clever low-price-high-turnover-narrow-profit margin in Bentonville, Arkansas, in the 1960s has been instrumental in transforming the way the world shops for groceries.
One of the many fatal mistakes of the Democratic election campaign last year was the party’s failure to understand how fed up many voters were with the viciously high prices in supermarket aisles – costs that were climbing all the time. Joe Biden, then president, made periodic complaints about price-gouging. But because they were blamed for inflation, the Democrats were unsure of how to address the issue.
In the era of eye-watering prices, more affluent Americans began to see the attractiveness of Walmart’s online offerings.
According to the Supermarket News bulletin – always a racy read – from last September, US households making less than $50,000 (€44,500) a year made up 41 per cent of Walmart’s monthly online users. But its affluent shopper base – comprised of households in the $200,000-plus range – climbed to 8 per cent. And those online baskets are coveted: they spend up to three times the lowest income bracket.
Trump would have had a sufficiently difficult time reducing the cost of the average shopping basket even before he embarked on his tariff crusade.
Now, having scolded Americans that little girls can do with three dolls this Christmas instead of 30, he remains fixated upon the shiny, palatial $400 million (€357 million) substitute Air Force One dangled as a gift by the Qatari government.
The only issue is the unavoidable cost of $1 billion just to make it safe from potential bugging devices, after which it would still pose a substantial security risk.
In a year when consumer sacrifices beckon, it is beginning to look as though that fantastical toy will remain out of reach.
