Target CEO Brian Cornell disputed claims that retailers are inflating prices because of corporate greed after Vice President Kamala Harris proposed the first-ever federal ban on price gouging in the food and grocery industry.
Cornell on Wednesday argued there is no room for price gouging in a sector as competitive as retail where margins are razor thin.
“We’re in a penny business,” he said during an interview on CNBC’s “Squawk Box.” “It’s a very competitive space.”
He pointed to other industries – like tech – that have much higher profit margins than retail.
Harris has argued that food suppliers and grocery stores have bolstered sticky inflation by keeping prices artificially high even as production costs have started to come down.
But Target’s CEO countered that customers are still hurting from sticker stock at grocery stores, which explains why affordable big-box retailers like Target and Walmart are prevailing.
Cornell said Target has made changes to appeal to “a consumer who is managing their budget carefully,” Cornell said.
The Minnesota-based retailer slashed prices on about 5,000 everyday items – including bread, soda, paper towels and pet food – and introduced a new line of basics with most items priced less than $10 this year.
While retail rivals like Home Depot and Macy’s reported disappointing earnings this week, Target raised its yearly profit guidance on earnings that beat estimates.
Shoppers also have more ways than ever to compare prices – across physical stores, e-commerce sites and social media stores, Cornell said.
Customers even have the option to price check items on their phones while in a brick-and-mortar store.
Harris has faced backlash from critics who fear the ban could reheat inflation or cause shortages.
Former president Donald Trump ripped into Harris’ price gouging plan, saying she has gone “full Communist.”
And while he did not mention Harris by name, Chicago Federal Reserve President Austan Goolsbee — who previously served as the chair of economic advisors during his “good friend” Barack Obama’s administration — said he was skeptical of a price gouging ban.
Target said on Wednesday it expects annual profit in the range of $9.00 to $9.70 per share, up from its prior range of $8.60 to $9.60.
Customer traffic across Target stores and its website grew 3%, even while shoppers added less to their carts than they did the year before.
Target shares spiked 12.3% on Wednesday after the earnings report.
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