In an industry with extremely fierce competition like retail, there is no room for price gouging. Target CEO Brian Cornell said Wednesday.
In an interview with CNBC's “Squawk Box,” the retail executive questioned campaign talking points accusing grocers of raising prices. He said retailers must be responsive to customers or risk losing business.
He was asked by CNBC's Joe Kernen, who referenced comments by Democratic presidential candidate Vice President Kamala Harris and asked whether Target or its competitors had ever benefited from price gouging. Harris last week proposed the first-ever federal ban on “price gouging by businesses in the food and grocery industry,” saying some companies were charging too much, exacerbating household inflation.
“We're a small business,” Cornell responded, noting that profit margins in retail are tight. He described the many places customers can look for lower prices or find items elsewhere, from going to a store to browsing on their phone to compare the price of a gallon of milk at different retailers.
Target's retail chief made the comments Wednesday after the discounter beat Wall Street's profit and revenue forecasts but was cautious about its full-year guidance. The company said it expects comparable sales, excluding the impact of store openings and closures, to be at the lower end of a flat range to increase 2%. However, the company raised its profit guidance, saying it expects adjusted earnings per share to be between $9 and $9.70, up from its previous forecast of $8.60 and $9.60.
For companies like Target, inflation and consumer anger over high prices continue to loom large. Numerous retailers, including home depot, Walmart and macy's department storeReports over the past two weeks have been that wary consumers are very picky about where they spend their money.
Cornell told “Squawk Box” that the retailer is trying to appeal to “consumers who are carefully managing their budgets,” adding that “value is in our DNA.”
Target is one of the consumer brands responding to shoppers' concerns by cutting prices. The company has lowered prices on about 5,000 everyday items, including diapers and peanut butter, in an attempt to boost foot traffic and sales. Others, such as McDonald'slaunching value-for-money meals.
So far, the discounts have resonated with Target: Customer traffic to Target stores and websites increased 3% in the quarter, even as shoppers put less money in their carts than a year ago.
Walmart Chief Executive Doug McMillon said last week that prices had fallen across many commodity categories, but he said inflation was “more stubborn” on the dry goods and processed food aisles.
During an earnings call with investors, he said some brands “are still talking about cost increases and we're pushing back aggressively because we think prices need to come down.”