As temperatures soared on a sweltering July day in New York City, shoppers at Queens’s largest mall said they were feeling the heat – of rising prices.
“T-shirts, basic t-shirts, underwear, the basic necessities – the prices are going up,” said Clarence Johnson, 48, who was visiting the Macy’s at the Queen Center mall to pick up shirts he ordered online.
As Donald Trump presses on with his trade wars, retailers have been passing price increases onto customers. Department stores – which rely on a variety of imported goods and materials, from shoes to t-shirts – have particularly been scrambling to deal with the flux in prices.
At Macy’s, signs advertising sales of as much as 60% off original prices were sprinkled around the store – even next to diamond-encrusted necklaces locked inside display cases in the jewelry department. But for some customers, the prices are still too high.
Nydia Olvera, 61, said that shopping at Macy’s is typically out of her budget, but she still makes trips to the store to check out the clearance section. “I remember they used to have these t-shirts for three dollars. Now, no more,” Olvera said. “Now I pay $7 to $9 for a t-shirt.”
A recent study from analytics firm DataWeave showed that the prices of footwear, apparel and bags increased significantly from January to June. Footwear has gone up as much as 4% and apparel by nearly 2% in the last six months.
And it’s unclear how much more prices could rise. The White House is still in the midst of negotiations with dozens of countries that could face new tariffs as high as 40%. These proposed tariffs are set to go into effect 1 August, after Trump pushed back an initial negotiations deadline of 9 July.
Last week, the Trump administration announced a deal had been made with Vietnam, which is the second largest manufacturer for apparel, footwear and accessories – the bulk of what is sold at department stores – after China.
According to the deal, exports from Vietnam will face 20% tariffs – half of the proposed levy of 46% Trump announced in April. Goods made in other countries, such as China, that are shipped from Vietnam will face a 40% tariff.
While retail executives have said the deal is better than the initial tariffs that were announced, it will still increase costs for retailers. Macy’s recently adjusted down its earnings forecast, citing uncertainty around tariffs. The company’s stock price is down 25% this year.
Macy’s CEO Tony Spring told CNBC, the financial news network, in May that some prices will stay the same but others are going to be more expensive, meaning the company will have to pass on some of the levies to customers. Other executives, including leaders from Nike, Target, Best Buy and Walmart have similarly said that they will have to pass on costs.
But retailers are also absorbing costs. Macy’s chief financial officer Adrian Mitchell said during the company’s earnings call in May that, while the company has been able to gain some vendor discounts, “we’re absorbing some of that price as well”.
Retailers must decide how much of the increased costs it can pass onto consumers, without losing loyal customers.
It is a tough environment particularly for department stores, which have lost customers to online retailers over the years. Sales at department stores made up just 2.6% of retail sales in 2023, compared to 14.1% in 1993, before the rise of online shopping.
At Queens Center, some Macy’s customers said they have yet to notice any price increases, especially when using coupons the company typically issues.
“The difference isn’t big; a little bit higher,” said Raphaelina Garcia, 33, who was shopping for a dress to wear at an upcoming wedding. “When you have the coupon, it’s the same price [as before].”
