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Lee Schafer: Will tariffs hit Target's customers or its suppliers?

Lee Schafer, Star Tribune (Minneapolis) on

Published in Business News

Walmart has been more open. Twice this month Walmart executive Steve Bratspies has walked investors through its item-by-item thinking. What products have a cheaper substitute? Which is in inventory already, and thus avoided the tax and can be sprinkled into the sales mix?

Bratspies reminded investors that Walmart has a big store to manage, so it can raise prices on products not subject to tariffs elsewhere in the store if there's a chance to do so.

"But we're going to run the Walmart model, which is we want to lead on price," he continued. "We want to keep prices lower and keep downward pressure on prices and not let them creep up."

Target needs to keep close to Walmart, so it's going to be doing the same thing.

And that's why it might not hurt as much as some have feared, as the trade war drags on, to be a Target customer. Target suppliers, on the other hand, have got to be feeling some real pain.

 

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