Buyers will probably increase product prices in the coming days because President Donald Trump's tariffs for Mexican imports. Goal CEO Brian Cornell said on Tuesday.
The 25% levies of the Trump management for goods from Mexico and Canada as well as a further 10% dotions for Chinese imports came into force on Tuesday.
According to Cornell, Target is heavily based on Mexican products in the winter months, and the tariffs could force the company to increase the prices for fruit and vegetables this week.
“These are categories in which we try to protect pricing, but the consumer will probably record price increases in the next few days,” he said in an interview with CNBC after Target published the result of the fourth quarter.
“If there is a tariff of 25%, these prices will rise,” added Cornell.
According to Cornell, prices for products such as strawberries, avocados and bananas could increase.
Read more CNBC tariffs reporting
During an investor day later in the morning, Chief Commercial Officer Rick Gomez said that it was too early to provide more details about the products and categories that will record price increases, since “teams work through it in real time” and the company has to look at the pricing holistically.
“I give you an example. We have 3 US dollars Christmas decorations. We don't want to have Christmas decorations of $ 3.60.
Another example he quoted was “Targets $ 5 t -shirts”. The company would like to continue to charge $ 5 for T-shirts. While it makes this price unchanged, it is more flexibility to increase prices for other products such as dresses.
“Maybe we'll look at clothes a little differently,” said Gomez. “So it is not as easy as the flow of costs. From a consumer perspective, we have to think and make sure that our price architecture makes sense and brings us to a place where we are competitive and we have affordable options.”
The CEO of Target Corp., Brian Cornell, speaks on the floor of the New York Stock Exchange 28, 2014 during an interview.
Brendan McDermid | Reuters
While inflation has decreased in recent months, the price increases did not alleviate as much as the Federal Reserve hoped for. The consumer budgets have further expanded high costs for food and housing, and Trump's tariffs have raised fears that households are exposed to even higher costs. The president and his advisors claim that the tasks will not increase the prices for consumers.
When asked whether he had spoken directly about the effects of prices with Trump, Cornell said that he “had not conducted this conversation with the president” and instead rely on the lobby arm of the retail industry to speak in the name of the goal.
“We were certainly very active in Washington and ensure that we deliver our point of view and we rely on it [the National Retail Federation] And the industry to offer our perspective for a broad number of members of the administration, “said Cornell.” So we worked very closely together [the NRF and the Retail Industry Leaders Association] To ensure that our voice is heard together and that we can share some of our findings and potential effects. “
When asked about China, Cornell played concerns about the effects of the cumulative 20% tasks for goods from the region. According to Cornell, the goal has reduced its dependence on China to about 30% of the imports of more than 60%. Gomez added to the speed of reducing this number by the end of next year.
The company was able to reduce its dependence on China by turning to aspiring manufacturing markets in the western hemisphere. Currently, only 17% of the clothing of target-a important category with high margins for the company is currently being produced after production has been shifted to countries such as Guatemala and Honduras, said Gomez. This shift in the supply chain is the key to bring products to customers faster, and is not associated with the same raw material concerns that are combined with the procurement of cotton in China.
Cornell's comments come after Target has achieved the result and income in the fourth quarter in the fourth quarter that exceeded the Wall Street expectations, but occupied a billel bar in the current quarter. The company said that it was partially on a weak current quarter, partly on how the concerns about purchasing affect purchasing, together with the consumer confidence that has dropped to the lowest level since 2021 in February.
The instructions of Target are the latest warning sign about the health of the economy, since it joined other retailers, such as WalmartPresent Elf Beauty And Home Depot for weaker than expected instructions for the first quarter or the overall year.
Comments are closed.