The Amazon Prime logo on packaging in Manhattan, New York on September 16, 2023.
Michael Kappelle | Alliance in pictures | Getty Images
Tariffs imposed by the Trump administration have imposed an additional cost on the nation’s retailers to manage during a period of persistent inflation.
While many are adapting to the change with limited price increases, the market giant Amazon hikes more than others.
Price increases are common among retailers trying to mitigate higher costs associated with tariffs. Companies including Walmart And Target said they used a portfolio approach to setting prices following tariff hikes, meaning they raised prices on some items but not others.
But companies rarely detail how much they are raising prices or on which items.
Amazon prices rose 12.8% this year on average through the end of September, according to an analysis of online pricing data by third-party research firm DataWeave. Prices at Target have increased 5.5% since the start of the year and prices at Walmart were 5.3% higher, according to the analysis.
DataWeave looked at approximately 16,000 items each from Amazon, Walmart and Target’s websites to conduct its analysis. The company says it continuously collects publicly available data and captures live product and pricing information. Its data covers categories, locations and time periods, according to DataWeave’s methodology.
While each of the three retailers raised prices throughout the year, the biggest increase came from Amazon between January and February, when prices of surveyed SKUs — a retail industry term for stock-keeping units — rose 3.7%, according to DataWeave’s analysis.
This increase actually preceded the majority of tariffs announced by President Donald Trump in April and could be the result of price normalization and a withdrawal of discounts after the 2024 holiday season, DataWeave found. However, Target and Walmart increased their prices by an average of 0.97% and 0.85%, respectively, during the same period.
DataWeave’s pricing analysis compares each retailer to its own prices over time, not to those of its competitors (and of course, lower initial prices might show a higher percentage increase), but there is a common trend.
“Together, these trends show a clear hierarchy: Prices have increased most quickly where consumers are buying by choice, not necessity, and most cautiously where they are buying based on need,” Karthik Bettadapura, co-founder and CEO of DataWeave, said in a statement.
For example, clothing prices increased by 11.5% on average between January and the end of September at Amazon, Target and Walmart. Prices for indoor and outdoor home goods increased by an average of 10.8% across the three retailers. Prices of pet and consumable products increased by an average of 6.1%, and health and beauty items saw prices increase by an average of 7%. Prices for hard goods, a category that typically includes products like electronics, furniture and appliances, rose 8.3%.
At Amazon, however, prices for these same categories increased more on average than at Target or Walmart.
Clothing prices increased by 14.2%, indoor and outdoor household goods prices increased by 15.3%, pet and consumable prices increased by 11.3%, health and beauty prices increased by 13.2%, and hard category prices increased by 11.9%.
Guru Hariharan, founder and CEO of AI-powered e-commerce data platform CommerceIQ, told CNBC he wasn’t surprised to see larger price increases on the market leader.
“Third-party sellers are much more exposed to tariff-related cost increases,” Hariharan said. “They don’t have the scale, inventory flexibility or leverage of private labels that large retailers like Walmart or Target can use to offset costs.”
As a result, market sellers often have no choice but to pass on the higher costs to the buyer, he said.
Although Target and Walmart also have online marketplaces, third-party sales represent a much smaller percentage of their revenue than Amazon’s, according to executives and earnings reports.
Many economists say the full impact of the tariffs has not yet been felt across the economy as retailers exploit inventory that entered the country at lower tariff levels.
“If we look at Amazon as the barometer of commodity prices in the United States, this trend is obviously expected to have a significant impact on the holiday season and the economy in the fourth quarter,” Hariharan said.
Amazon shoppers don’t seem fazed by the prices. The company said sales from its online store increased 10% in the third quarter compared to the same period last year. Third-party seller services – the revenue Amazon earns from third-party sales, including commissions, fulfillment fees, shipping and advertising – increased 12% during the same period.
During the company’s third-quarter earnings conference call, Amazon CEO Andy Jassy said, “We remain committed to keeping prices tight and matching or beating the prices of other major retailers.” »
The company’s Chief Financial Officer, Brian Olsavsky, added: “Our great pricing, wide selection and fast delivery times continue to resonate with customers. »
In response to DataWeave’s price analysis, an Amazon spokesperson told CNBC: “Among any major retailer’s selection, you can select products whose prices have increased – if that’s what you’re looking for – and it’s just as easy to find products, in equally large volumes, whose price has decreased or stayed the same over the same period.”
“The reality is that we offer low, competitive prices to Amazon customers and, based on our comprehensive analysis of millions of popular products that customers buy, we have not seen price increases outside of normal fluctuations,” the spokesperson said. “We continue to match or beat prices compared to other retailers on the wide selection of products in our store, and that’s why customers trust Amazon as their destination for low prices and why we continue to generate more sales from customers.”
Investors and shoppers will get their latest information on how America’s largest retailers are managing prices when Target and Walmart report third-quarter results in mid-November.
Target has said several times this year that it would raise prices “as a last resort” to combat rising costs. A company spokesperson, in response to DataWeave’s findings, cited to CNBC the example of keeping prices of back-to-school items like pencils, notebooks and folders at stable levels from 2024 to 2025.
Walmart told CNBC, “We will do everything we can to keep prices as low as possible for as long as possible.” The company said it has permanently lowered prices on 2,000 items since February – as opposed to its temporary reductions known as Rollbacks.
In early September, Walmart CEO Doug McMillon said the tariffs had led to higher costs for the company.
“We’ve seen a steady rise, sort of a gradual increase when it comes to our cost levels in general merchandise, which has created the single-digit inflation that we’re facing now,” McMillon said at the Goldman Sachs Global Retail Conference.
The Federal Reserve estimates that tariffs contribute five-tenths or six-tenths to the core personal consumption expenditures price index, the central bank’s preferred measure of inflation, Fed Chairman Jerome Powell said last week. Excluding tariffs, Powell said core PCE could be in the range of 2.3% to 2.4%, instead of the 2.9% recorded in August.
The widely watched Consumer Price Index, a broader measure of inflation, showed a 3% year-on-year increase for September. Direct CPI comparisons for the categories in DataWeave’s study are difficult to pin down, but prices for home furnishings increased 3.7% between January and September of this year. Personal care items increased 3.5% during the same period, and clothing prices rose 2.1%, according to CPI data.
— CNBC’s Nick Wells and Jodi Gralnick contributed to this report.
Editor’s note: This article has been updated to include Amazon’s full statement to CNBC in response to DataWeave’s findings.