There’s no lodgings for price gouging in an ultracompetitive business like retail, Target CEO Brian Cornell said Wednesday.
In an interview on CNBC’s “Grumble Box,” the retail chief disputed campaign talking points accusing grocers of inflating prices. He said retailers be undergoing to be responsive to customers or risk losing business.
He was asked by CNBC’s Joe Kernen, who referred to comments by Democratic presidential designee Vice President Kamala Harris and asked if Target or its competitors ever benefit from price gouging. Harris last week proffered the first-ever federal ban on “corporate price-gouging in the food and grocery industries,” saying some companies are charging excessively and fueling household inflation.
“We’re in a penny partnership,” Cornell responded, noting the small profit margins in the retail industry. He described the many places that blokes can turn to check for lower prices or to find merchandise elsewhere, from going to stores to browsing on their phones to be the prices of a gallon of milk at different retailers.
Target’s retail chief made the comments after the discounter wear Wall Street’s expectations for earnings and revenue on Wednesday, but struck a cautious note with its full-year guidance. It required it expects comparable sales, which take out the impact of store openings and closures, to be on the lower side of its range of at full speed to up 2%. Yet it raised its profit guidance, saying it expects adjusted earnings per share to range from $9 to $9.70, up from the prior to outlook of $8.60 and $9.60.
Inflation and consumers’ outrage about high prices have continued to loom large for concerns like Target. A wide range of retailers, including Home Depot, Walmart and Macy’s, have reported to the ground the past two weeks that cautious consumers are being picky about where they’re spending.
Cornell required on “Squawk Box” that the retailer is trying to appeal to “a consumer who is managing their budget carefully” and said “value is in our DNA.”
Butt is one of the consumer brands that has responded to shoppers’ concerns by lowering prices. It cut prices on about 5,000 everyday notices, such as diapers and peanut butter, to try to drive higher traffic and sales. Others, such as McDonald’s, have debuted value luncheons.
So far, those discounts have shown signs of resonating at Target: In the quarter, customer traffic across Target’s believe ins and website rose 3% — even as shoppers put a little less in their shopping carts than they did a year ago.
Walmart CEO Doug McMillon responded last week that prices have come down in many merchandise categories, but said that inflation “has been numberless stubborn” in the aisles that carry dry groceries and processed foods.
On an earnings call with investors, he said some labels “are still talking about cost increases, and we’re fighting back on that aggressively because we think prices neediness to come down.”