With Memorial Day just around the corner, it’s no surprise that companies are getting swept up in the hype and offering Memorial Day sales. Home Depot is launching one of the biggest sales of the year, with items like outdoor furniture, lawnmowers, and garden supplies all being heavily discounted.
However, there may be more to this sale than just discounting products during an important holiday. Home Depot is one of many companies that have been hit hard by tariffs earlier in the year. With the U.S. placing higher taxes on many imported goods, costs have gone up, but Home Depot has stated that prices for most products shouldn’t increase and is instead using this sales tactic to bring in as many customers as possible during uncertain economic times.
The Effects Of Tariffs
Tariffs have recently become a divisive issue in the U.S., with many American businesses facing higher inventory and production costs as many import their goods from other countries. Home Depot imports many items from China, which were heavily taxed until recently. With the increasing costs of time, Home Depot faced a dilemma: Where should the extra costs go?
Some companies are adding the extra costs to their products, making consumers pay more for goods, while others are big enough to absorb the costs themselves. Home Depot is trying to keep customers coming in by offering sales on items, even if in the short term, it means making less revenue on each item.
What To Discount
Home Depot looks at every single product they offer and uses data-driven analytics to calculate how tariffs are affecting their prices. Some items are hit much harder by tariffs, depending on where they are made.
Items like outdoor and garden essentials don’t get driven up in price by import taxes, meaning that Home Depot can afford to put them on sale. Other alternatives to beating tariffs are to look at alternative countries for production, but setting up shop elsewhere would cost a monumental amount in the short term.
A Win-Win
Home Depot has years of data to see what items are popular in which seasons, and as the U.S. starts to near summer, outdoor items like barbecue grills and DIY essentials start to draw high demand. With tariffs already not lowering profit margins, these items can be discounted more, making both Home Depot and consumers happy.
Home Depot hopes to attract customers who want to spend their summer outdoors, and others who want to start DIY projects. While they are in the store looking at the discounted items, the prediction is that they will buy other products, spending more overall.
Beating Tariffs
In early April 2025, tariffs on imported and exported goods, especially from China, were at an all-time high. Many companies had to adapt to survive quickly during the economic uncertainty. Home Depot pivoted its supply chains, moving many of them to other countries.
Half of Home Depot’s products are now sourced domestically in the United States, while other countries with lower tariffs, like Vietnam and Mexico, are responsible for the majority of the rest. This quick pivot to beat tariffs ensured that profit margins could stay high and customers didn’t have to take on the burden of the tariffs.
How Consumers Are Affected
While many other competitors have had to raise their prices in the face of tariffs, Home Depot has said that customers won’t be affected by them. Consumers can go into any Home Depot now and enjoy the same of similar prices on products from before the tariff increases. The Memorial Day sale will incentivise shoppers to flood the store and buy discount items while there is stock.
This tactic, in the face of tariffs hitting other stores, will keep customers coming back. Other items should face steady price raises to keep up with inflation and economic uncertainty, which means that nothing should radically change in price overnight.
Beating Other Stores
Home Depot knows that rival stores do not have the same supply chains and share of U.S.-made products that they have. That means that Home Depot can weather the economic storm while many others are forced to raise the prices on imported items.
Companies like Walmart have announced that the high tariffs from April will affect the prices of some products, which showcases a different response to economic pressures and the effect it will have on consumers. Currently, the focus on outdoor products gives Home Depot an edge, as they are in high demand and are not affected much by any tariffs.
A Reduction In Tariffs
The high cost on imported goods has recently gone down after the U.S. had a meeting in Geneva with China. An agreement was made where a 90-day tariff reduction would be put in place.
This will mean that products from China won’t have to be increased in price by other competitors, but it means little for customers who shop at Home Depot. The future is still somewhat uncertain, with this period of tariff leniency only being temporary, and anything could happen in the coming months.
The Gamble Of Discounts
Home Depot running such high discounts for Memorial Day does have risk factors. The company has to spend a large sum of money on promotions and shelf space.
The hope is that customers will be attracted to the store by discounts and spend more on items overall. Profit margins should be lower in the short term, but this calculated risk should lead to increased foot traffic and brand loyalty.
Strategic Sales
In the face of uncertainty as tariffs fluctuate, no one knows what will happen next. Home Depot will continue to absorb the costs of any tariffs in the short term, while using the Memorial Day Sale and other strategic discount sales to bring in more customers and purchase other products that haven’t risen in price.
Increasing overall spending and visitors during the sale. Customers will leave happy, and Home Depot will increase its brand reputation.
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