Raising consumer prices to cover the costs of President Donald Trump’s tariffs will be “a very last resort” for Target, CEO Brian Cornell said Wednesday.
The statement came as the target reported weaker sales than expected in the first quarter, and reduced full-year sales forecasts. Retailers who don’t do business as well against rivals well known for bargain prices still “have a lot of levers to mitigate the impact of tariffs,” Cornell said.
The company has denounced the soft sale for several factors, including consumer uncertainty about the economic direction and a backlash against recent diversity, equity and a reduction in inclusion programs.
Target’s Chief Commercial Officer Rick Gomez told investors that the retailer team is “working hard to minimize tariff headwinds through multiple strategies, including negotiations with vendor partners and recovery in assortment decisions.”
Target’s stock fell more than 5% before the market opened on Wednesday morning.
Over the past year, the company has launched discounts to attract shoppers who have withstanded inflation, and has promoted plans to expand third-party markets to offer a wide range of items. It also sought to counter criticism of the widespread diversity policy walkback this weekend after killing police in his Minneapolis hometown five years ago.
Retailers across the industry are working to increase shopper prices to offset Trump’s tariff costs.
Home Depot ruled out price hikes near Tuesday, saying its scale and supply chain arrangements will allow it to navigate recent trade policy moves. In contrast, Walmart warned that shoppers could start looking at prices soon at the end of this month, saying the rapidly changing tariffs were created to “operate in a challenging environment.”
The president usually avoids appearing to determine the strategy of individual companies, but Trump has denounced the decision to Walmart. Last weekend on his social media platform, he requested to “eat tariffs,” adding, “I’m watching, and so are your customers!!!”
Some major companies selling products at major retailers, including Walmart, said they have raised prices or are considering doing so, including tool makers Stanley Black & Decker, Consumer Products Giant Procter & Gamble, Sportswear Brand Adidas and toy maker Mattel.
Mattel, the maker of Barbie dolls, also fired fire from Trump. Trump threatened to hit it with 100% tariffs this month after informing him that the price hike was on the table.
Large companies generally take up more latitudes than their smaller counterparts to handle increased costs and other economic headwinds. The U.S. Chamber of Commerce and independent business owners have threatened to remove many small businesses, warning that tariffs are already lacking in competition due to large business rivals.
The National Retail Federation, which represents some of the nation’s largest retailers, highlights the risks in lobbying against new taxes. “Small businesses are affected by disproportionate tariffs, and many companies say they have to raise prices or close them,” the website said.
“Consumers are still spending despite the fact that consumers are being driven by rising tariffs,” said Jack Kleingent, NRF’s chief economist, in a statement last week after retail sales announced a modest 0.1% increase in April. But even the biggest multinational companies are not insulated from tariff-driven uncertainty, says NFR and industry analysts. Several large companies have revised or repealed their financial outlook in recent weeks. We don’t know how the White House trade agenda will affect it.