Jacob S.’s Post

How is your enterprise preparing for tariff changes?

The TJX Companies, Inc. says tariff hikes could create a potential opportunity to acquire excess inventory from other brands at advantageous prices. #supplychain #retail #inventory #tariffs

Among the many advantages that stores like TJX, Ross and Burlington have over mainstream retail companies: some protection from protectionism. The sourcing model - The nature of off-price retailers’ merchandise pipelines — where much of their assortment is obtained from retailers and brands offloading excess inventory — serves as a cushion against tariffs. In fact, this possibly gives them an advantage, according to analysts and the companies themselves. Price competition - Any time mainstream retailers raise prices, for any reason, they sharpen an edge that off-pricers already have over them. “Off-price is focused on maintaining a value gap to full-price retailers,” Bank of America’s Hutchinson and Nuñez wrote. “If full-price raises prices to combat tariffs and customers accept the increase, this would raise the ceiling for pricing at off-price retailers.” The TJX Companies, Inc. Ross Stores, Inc. Burlington Stores, Inc. Coat #Retail #offprice   GAP stress continuous improvement - https://lnkd.in/gS_QrNHz

Amid rising concerns over tariffs and their inflationary impact, off-price retailers like Burlington, Ross Stores, and TJX Companies showcase unique resilience. Their sourcing model—relying heavily on excess inventory from domestic suppliers—minimizes direct tariff exposure. This strategy not only shields them from significant cost increases but could also enhance their competitive edge. As mainstream retailers grapple with higher prices, off-pricers may see increased opportunities to source discounted merchandise, maintaining their value-driven appeal to consumers. It’s a testament to how agility in sourcing and pricing strategies can turn market disruptions into advantages. What are your thoughts on how trade policies impact retail strategies? #merchandising #retail https://lnkd.in/gJm76vHt

Surprisingly, some retailers are not at all worried about higher tariffs. Discount stores, operated by Ross, TJX, and Burlington and others may actually benefit in 2025, since they source their off-price merchandise from other retailers. If high prices cause demand to falter at full-price stores and cause an inventory glut, the discounters may win big. https://lnkd.in/gZJRhPR5 #retail #retailnews #ecommerce #tariffs. #discountretailers

Costco Wholesale CFO, Gary Millerchip, is readying his team for the pending increases to tariffs in 2025, according to this CFO Dive article by Maura Webber Sadovi - what are you doing to brace your business? If you would like to talk in more depth about tariff management - use this link to book a call - https://lnkd.in/eyckAthd - let’s talk! #ValueThroughInsight #CostReduction #cfo

The first half of 2024 cargo shipments for retail are expected to total 12.1 million containers, up 15% and reversing the 12.8% decline reported a year ago, according to the Global Port Tracker compiled by Hackett Associates for the National Retail Federation (NRF). Hackett reports monthly inbound cargo volume at the nation’s major ports will reach its highest level in nearly two years this summer. NRF has forecast core retail sales to grow between 2.5% and 3.5% this year over 2023. Through the first five months of this year, NRF reports total sales rose 2.13% year over year and core sales, excluding automobiles, gasoline, and restaurants increased 2.48%. #retailsales #supplychain #imports

Interesting article (see comments) from Supply Chain Dive about how off-price retailers like TJX may gain an advantage from tariffs. Off price retailers buy their inventory after it is already landed. So they don't content directly with the tariffs. And even if tariffs are a cost input - they're still buying based on retail price discounting, and the distress of the inventory (the more inventory available, the sharper your pencil needs to be).

Should Inventories Be Pulled Ahead Over Tariff Threats? Costco Wholesale is among retailers and vendors already accelerating inventory arrivals as a short-term solution to minimize exposure to President-elect Donald Trump’s promised tariffs. What lessons should have been learned on such a move from past trade wars? Read the discussion and share your comments below: https://lnkd.in/e4WwJtAa Shannon Flanagan "Trump has an upward battle to fulfill this campaign promise. The impact to our economy is too significant. Retailers should be surgical about what and when they choose to move forward and not have a knee jerk reaction." Gail Rodwell-Simon -- Retail • Strategy • Transformation "I think that the strategy makes sense if the retailer has the flexibility to manage their cashflow in the short term. This would also make the most sense on evergreen, non-perishable (or non-trendy), replenishment type items." •Shep Hyken "Loading up on inventory is a short term solution that is only delaying what’s coming. It may allow for a slower ramp up in price increases due to the tariffs. And, as the article points out, increasing inventory comes at a cost, which will also be passed on to consumers."

Costco Wholesale has a plan to deal with expected tariffs, despite “a lot of uncertainty around the timing and scope of the changes, ” which make it difficult to predict the impact, CFO Gary Millerchip said Thursday during the company’s fiscal Q1 earnings call. “In general, of course, tariffs raise costs so that’s not something that we see as a positive,” Millerchip said during the call. However, he also noted that any headwinds would similarly affect competitors. #wholesale #tarriffs #earnings https://lnkd.in/gFXqV_Bp