American e-commerce giant Amazon.com (AMZN) has increased the prices of many essential items in recent months, despite promising to keep them low. According to a Wall Street Journal report, Amazon has quietly raised the prices of “hundreds of essentials” over the five months since President Donald Trump announced tariffs in April. These tariffs threatened to disrupt global retail pricing and supply chains.
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The report notes that an analysis of nearly 2,500 Amazon products found that prices for low-cost items, such as deodorant, protein shakes, and pet care items, have notably increased. On average, these products saw a price increase of 5% between April and July. For instance, a can of Campbell’s (CPB) New England Clam Chowder cost $1.98 on January 20 but jumped to $2.58 by July 1, representing a roughly 30% price hike.
Here’s How Tariffs Have Impacted Sellers
Amazon sellers say they have not raised the prices they charge to retailers, but these goods have indeed become costlier on Amazon. Meanwhile, prices of imported goods and those assembled in the U.S. have seen even more drastic increases. Goods listed under Amazon’s “everyday essentials” are mostly sold with no meaningful profit margin, as these items typically incur high shipping costs.
When sweeping tariffs were announced in April, Amazon and CEO Andy Jassy vowed to keep the prices low for consumers. However, according to the report, Amazon has done the opposite, lowering prices on some expensive goods while increasing them on low-cost goods.
Amazon has denied these allegations, arguing that the basket of goods analyzed in the report is not “representative” of overall pricing trends and stating that it has not seen material changes in average prices. In a company statement, Amazon said, “Our commitment to offering low prices, not relative percentage changes, is what delivers the most value to our customers.”
Amazon and Rival Retailers’ Strategies
On the other hand, rivals such as Walmart (WMT) have been cutting prices on similar low-cost items, while Target (TGT) is prioritizing other cost-cutting measures before resorting to price hikes. The ongoing uncertainty surrounding international trade agreements and Trump’s sudden policy shifts have made it difficult for manufacturers and retailers to set consistent pricing strategies.
Trump’s initial 145% tariff on Chinese goods put several retailers in a difficult position, though the eventual easing of trade negotiations resulted in a flat 30% tax. In response, retailers are engaging in price negotiations and seeking alternate suppliers, primarily from countries not affected by the high tariffs.
Is AMZN a Buy, Hold, or Sell?
On TipRanks, AMZN stock has a Strong Buy consensus rating based on 44 Buys and one Hold rating. Also, the average Amazon price target of $251.44 implies 11.2% upside potential from current levels. Year-to-date, AMZN stock has gained 3.1%.
