What: Major US department stores implement price increases across footwear, apparel, and bags as tariff impacts accelerate, with footwear leading at 4.2% higher prices.

Why it is important: The price increases demonstrate how tariffs are finally reaching consumers after retailers' initial absorption efforts, potentially reshaping purchasing patterns across retail categories.

US department stores are experiencing an accelerating wave of price increases driven by tariffs, with May 2025 marking a significant turning point. DataWeave's analysis of nearly 15,000 SKUs across major retailers reveals footwear leading the price hikes, with Macy's showing a 4.2% increase, followed by Nordstrom at 3.1% and Dillard's at 2%. The impact varies significantly by product category, with footwear experiencing the fastest price reactions due to its heavy reliance on Chinese manufacturing and steep baseline duties. Apparel shows more modest increases, ranging from 1.8% to 2%, reflecting its longer design cycles and more diversified supply base. The newly announced Vietnam trade deal, implementing a minimum 30% total tariff rate, further complicates the situation for retailers, particularly affecting major brands with significant Vietnamese manufacturing operations. Industry experts, including former Walmart CEO Bill Simon, note that companies are now passing on costs they can no longer absorb internally, leaving consumers as the final arbiters of these pricing decisions.

IADS Notes: According to March 2025 data, 62% of consumers have expressed serious concern about rising retail prices, while BCG projects $640 billion in additional US import costs from tariffs. This aligns with February 2025 findings showing the elimination of the USD 800 de minimis rule affecting millions of daily shipments. Consumer confidence has recorded its sharpest decline since August 2021, reflecting broader market anxiety about potential price increases. Major retailers like Costco and Walmart are actively pressuring suppliers for concessions, while others explore manufacturing relocation, as evidenced by Shein's offering 30% higher procurement prices to move production to Vietnam.

Inside America’s department stores, tariff-triggered price hikes are picking up