Some retailers will pass tariff costs onto consumers

Channel: Fox Business
Published: 05/30/2019 03:53 PM

Euromonitor International Head of Retailing Michelle Grant on the impact of tariffs on U.S. retailers, the potential impact on consumers and the outlook for beauty stocks. FOX Business Network (FBN) is a financial news channel delivering real-time information across all platforms that impact bo...

Tariffs on chinese goods coming into america take effect at the port of long beach. As of today, market retail watcher michelle grant is winners michelle all the ships carrying chinese goods that arrive at long beach today start paying that twenty five percent tariff. I got ta believe that that's going to hit consumers at the cash register is that right, yeah. There certainly will be an impact at ...
he cash register, but it may vary. Some retailers, such as walmart, have come out and said that they will pass the increase in cost from the tariffs on to consumers, but retailers, like kohl's, have said that they will absorb the costs because their customers are price sensitive, so itcould go either way depending on How strong the retailer thinks that they can? You know pass on those price increases if the tariffs stay on for a long period of time. I take it that they would all be passed on at some point right. Yeah definitely, but there are ways to find other efficiencies in the retail business, so it may be that, with a long enough time frame, you can reorganize your supply chain and move to other countries or you cut costs in other areas of the business. In order to keep the margins at the level that you want them now, the beauty companies sephora they're, going to close all their stores for one daynow. This is sensitivity trading there's. This is not a retail ice age, but in general i know that you like this kind of company, a beauty company or ultra beauty, for example. Now i know you like them. I know you like the stock.

You tell us why? Well, first, there's a huge tailwind, because consumers in the millennial and gen z generation spend more of their income on beauty products than other generations have in the past. So they're the categories themselves are growing rapidly, and these two retailers invented a new way of shopping in the stores for beauty, which is that the consumers can try and sample a lots of different brands. Without you know, goingto a beauty counter like at a department, store or just picking a box up at the drugs door, so millennials and gen z really resonate and traffic to those stores. They have a great in-store experience. It'S not only about buying products but their services. You can get a makeover, you can get your hair done, but what also is special about these retailers is. They saw the rise of the internet, so they have great digital properties both for transactions, but also for building communities. People who spend a lot on makeup like to be educated, so they do a lot of research online. First, i spent a fortune on makeup, but somebody else pays for it. Michellethank you very much for joining us. We do appreciate it. Sephora and ulta beauty will remember him.

Thanks for sean see you soon, you're welcome [ music, ].

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