Buyers will probably see the prices of products increase in the coming days due to President Donald Trump’s prices on Mexican imports, Target CEO Brian Cornell said on Tuesday.
The 25% of Trump administration from the goods of Mexico and Canada, as well as an additional 10% right on Chinese imports, took effect on Tuesday.
Cornell said Target is based strongly on Mexican products during the winter months, and that prices could force the business to increase the prices of fruits and vegetables this week.
“These are categories where we will try to protect prices, but the consumer will probably see price increases over the next two days,” he told CNBC in an interview after Target has published his budgetary budgetary income.
“If there is a 25%rate, these prices will increase,” added Cornell.
Cornell said prices could increase for products such as strawberries, avocados and bananas.
During a day of investors later in the morning, the commercial director Rick Gomez said that it was too early to provide more details on the products and categories that will see price increases because “the teams work it in real time” and the company must examine the prices in a holistic manner.
“I’m going to give you an example. We have Christmas ornaments of $ 3. We don’t want to have Christmas ornaments of $ 3.60. We want to keep them at $ 3.
Another example he cited was Target’s “T-shirts of $ 5”. The company wishes to continue to charge $ 5 flat for t-shirts. Thus, although it can leave this price unchanged, it has more flexibility to increase prices for other products, such as dresses.
“So maybe we will look at the dresses a little differently,” said Gomez. “So, it is not as simple as to browse the cost. We must think about it from the point of view of consumers and ensure that our price architecture makes sense and puts us in a place where we are competitive and that we have affordable options.”
The CEO of Target Corp., Brian Cornell, speaks during an interview on the prosecution of the New York Stock Exchange on November 28, 2014.
Brendan McDermid | Reuters
While inflation has been held in recent months, price increases have not moderate as much as the federal reserve hoped. The high costs for food and housing have continued to extend consumer budgets, and Trump prices have feared that households are even higher expenses. The president and his advisers argued that the tasks will not increase consumers’ prices.
When he was asked if he had spoken directly to Trump impact prices prices, Cornell told CNBC that he had “not had this conversation” with the president and had rather relied on the lobbying arm of the retail industry to speak on behalf of the target.
“We have certainly been very active in Washington, making sure that we offer our point of view, and we count on [the National Retail Federation] And the industry to provide our point of view to a large number of administration members, “said Cornell.” We therefore worked in close collaboration with [the NRF and the Retail Industry Leaders Association] To ensure that collectively, our voice is heard and we can share some of our ideas and potential implications. “”
Asked about China, Cornell has minimized concerns about how cumulative tasks of 20% on the goods in the region will affect buyers. Cornell said Target has reduced its dependence on China to around 30% of imports by more than 60%. It is at the rate of reducing this number to less than 25% by the end of next year, added Gomez.
Society was able to reduce its dependence on China by turning to emerging manufacturing markets in the Western hemisphere. Currently, only 17% of Target’s clothes – a high margin key category for the company – is manufactured in China after production has been transferred to countries like Guatemala and Honduras, Gomez said. This change in the supply chain is essential to obtain products from customers faster and also does not come with the same concerns of raw materials to be associated with cotton supply in China.
Cornell’s comments are intervened after Target has published revenues and fourth quarter income which exceeded the expectations of Wall Street but threw a veil during the current quarter. The company said that it was preparing for a low quarter in part because of the impact of pricing concerns on purchases, as well as the slippery confidence of consumers, which has dropped in February at its lowest level since 2021.
Target guidelines are the last warning sign on the health of the economy, as it has joined other retailers such as Walmart,, Elf beauty And Home Depot By giving weaker than expected advice in the first quarter or in the full year.