Latest news with #AmericanShoppers
Forbes
4 days ago
- Business
- Forbes
Survey: Retailers Face Consumer Backlash Over Tariff Price Hikes
Shoppers are paying close attention to how retailers handle the import crisis, with most saying they would reward brands that absorb higher costs. Three out of four consumers would be inclined to abandon their favorite retail brands over claims of price increases necessitated by new tariffs. That's one of the top-line findings in a new survey by First Insight, suggesting that inflation-weary shoppers are annoyed and growing suspicious of major retailers' announcements about rising import costs. Among U.S. shoppers, only one in four said they are convinced that tariffs alone are responsible. Inversely, 80% of the 1,120 American shoppers surveyed said they would reward brands that absorb those extra expenses with increased loyalty. Unlike during the pandemic, a cataclysm that played no favorites, the trade war is fast becoming a consumer marketing minefield. In spite of persistent uncertainty and chaos surrounding the U.S. government's evolving tariff policies, most retailers have issued public statements about raising prices. Among 306 top retail and brand executives surveyed by First Insight, 77% reported they had preemptively announced price hikes even though the majority, 60%, concede they expect to lose market share to competitors that don't. The survey reveals some strong undercurrents in the consumer economy that retailers ignore at their peril, and a clear opportunity to attract new customers. For starters, price trumps brand loyalty more than ever. Pandemic-driven inflation coupled with the surge in e-commerce gave consumers the motivation and the tools to aggressively shop for the lowest price for just about anything. The 'value for money' calculation is increasingly top of mind among consumers. Every major retailer of groceries and other comparable commodities and essentials is devoting more shelf space to lower-priced, higher-profit private label brands that shoppers deem equivalent to national brands. Brand loyalty is losing its grip on the many who are struggling to pay higher mortgage, rent, and insurance bills. Shoppers are better informed than ever. One can cruise the aisles of any store and price-check items using their cell phone before deciding whether to buy. That gives retailers who hold the line on prices a leg up on competitors that pass on higher tariff expenses. Hold the line might be a good slogan for an ad campaign. As an industry, retail profits soared during the pandemic. Walmart, for example, reported earnings per share that rose 70% over the past three fiscal years. The dichotomy between household budget pain and outsized retail profits was not lost on the public and suspicion lingers. In 2022, for example, McDonald's said it was raising prices 10 percent at its U.S. restaurants while simultaneously reporting better-than-expected sales and profits. Its CEO explained at the time, 'consumers are willing to tolerate it.' The dust has yet to settle on whether and by how much import tariffs might rise. Either way, 'Any talk of pricing can not only shake the market, it can shake the consumer,' according to Sonia Lapinsky at Alix Partners, a retail advisory consultancy. Lapinsky recently told The Wall Street Journal, 'If they hear about price increases, it might just prevent them from going in the store at all.' Consumers surveyed by First Insight said that the top two actions retailers and brands can take to offset price changes are: 1) clear communication–especially around if and why prices are rising. And 2) introduce new efforts to soften the blow, including offering loyalty points or discounts. Good advice in any season.
Daily Mail
20-05-2025
- Business
- Daily Mail
Home Depot proves greedy Walmart bosses wrong in major win for for all shoppers
The Home Depot just gave American shoppers a little peace of mind. Its executives don't expect major price changes over the next 12 months, a huge contrast to other big chains — like Walmart, Target, and Best Buy — that have warned about tariff-related price hikes. 'We don't see broad based price increases for our customers at all going forward,' Billy Bastek, the executive vice president, said during The Home Depot's earnings call. Executives at major brands have roiled President Donald Trump with their announcements about price hikes. The President, who campaigned on lowering prices during the 2024 election, has lashed out against Walmart and Amazon after both companies said his policies would make consumers pay more for common products. In a post on Truth Social, the President told the companies to 'eat the tariffs.' But major corporations have to protect their profits, retail experts told The companies, who have relied on US foreign trade deals to supply their stores, will likely face major layoffs if they don't stay in the green. 'Produce from overseas will be impacted heavily because margins are low and costs need to be passed across,' Neil Saunders, the retail expert at Global Data, previously told 'General merchandise, especially home products and electronics, will also be impacted as they are heavily reliant on overseas production.' But no price rises at The Home Depot, which has 2,300 stores and dominates the US DIY sector, from two key factors. First, the company has deep US product sourcing. Second, its betting President Donald Trump will extend a pause on higher-than-expected 'Liberation Day' tariffs. 'We anticipate that 12 months from now, no single country outside of the United States will represent more than 10 percent of our purchases,' CFO Richard McPhail said in a statement. 'We intend to generally maintain our current pricing levels across our portfolio.' The Home Depot also said it would start slashing products that are produced abroad. 'There are items that we have that could potentially be impacted from a tariff that, candidly, we won't have going forward,' Bastek added. Walmart's executives said shoppers will likely see increased prices because of Trump's tariffs Home Depot sources less than half its products outside North America and has been deliberately pulling back from China in recent years. That strategy is paying off. The company reported $39.86 billion in net sales for the quarter ending May 4, topping analyst expectations. Shares rose 2 percent in premarket trading after the company reiterated its fiscal 2025 forecast. That is also standing in stark contrast to other major American brands that have removed their 2025 financial expectations. Home Depot's founder, Ken Langone, recently joined a growing list of executives that had criticized Trump's tariff policies. 'I don't understand the goddamn formula,' the billionaire said. 'I believe [Trump's] been poorly advised by his advisers about this trade situation — and the formula they're applying.' But the pricing pullback shows that retailers are caught in between two difficult choices: say nothing, or warn customers and risk angering the President. With rivals sounding alarms about rising costs, Home Depot is trying something bolder: standing still.
