Re-Inventing Retail

From the Co-Founders of The Retail Owners Institute.
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Ominous Impacts from "Tariffs Wars"

On June 19, 2018 in From The Co-Founders by The ROI

The so-called "Tariff War" that's in the headlines these days seems to most of the public to be a yawner, a distant spitting contest.

But to us, it seems much closer to home.

We're in the business of helping retailers and, when we can, providing a heads up when we see trends that may be impactful. The current trade disputes between the United States and most major countries in the world is one of those times. Retailers need a heads up.

First of all, every increase in costs is eventually paid for by consumers, e.g., your customers. It's an undeniable fact of economic life: costs are passed on.

So, when the Trump Administration announced on June 15 it will issue tariffs on an additional $50 billion of Chinese imports, the response from the retail community was prompt. It can be generally summarized in one word: "Yikes!"

Matthew Shay, President and CEO, National Retail Federation:

“Tariffs are taxes on American consumers, plain and simple. These tariffs won’t reduce or eliminate China’s abusive trade practices, but they will strain the budgets of working families by raising consumer prices."

Rick Helfenbein, President and CEO, American Apparel & Footwear Association:

"We remain deeply concerned. Any new tariffs present an immense burden for the American people. There are grave consequences to the use of tariffs. Congress needs to step in now to end this dangerous obsession. Tariffs are nothing but a hidden, regressive tax, plain and simple."

Michael Petricone, Senior Vice-President, Government & Regulatory Affairs, Consumer Technology Association:

"Tariffs go against the interest of the American people. The economy will respond to the president's tariff agenda by increasing the cost of goods that people use every day, harming the U.S. economy and sinking the stock market."

Here's one micro-example substantiating these concerns: earlier this year, 20% tariffs were applied to "laundry equipment." And today, prices for washers and dryers have increased 17%. ("Trickle down tariffs", anybody?)

The current focus is United States versus China. Grim as that is, the big picture of U.S. tariffs versus the rest of the world – Canada, Mexico, the U.K., European Union, etc – is truly ominous.

Remember, the prices retailers pay will go up. And those added costs must be covered somehow.

Everybody's families will be paying more. Or having to cut spending in some areas (your stores?) when faced with higher prices elsewhere.

Today, it may be a far-off spitting contest. But tomorrow or soon after, it's going to impact our customers, and thereby, impact retailers.

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About The Co-Founders

Pat Johnson and Dick Outcalt, The Co-Founders of The Retail Owners Institute^®, have been called "The Zen masters of retail finance!"

Since 1999, they have been assembling their proprietary content into a unique self-help website. The Retail Owners Institute is an unmatched resource that assists retailers worldwide with basic financial training, assistance and easy-to-use tools.

Their engaging and empowering how-to resources about the financial levers in retailing are informative, fun(!), and retailer-friendly. Their promise: "Everyone will 'get it'!"

Pat and Dick are recognized experts in strategic retailing. Working only as a team – Outcalt & Johnson: Retail Strategists, LLC – they have been consulting, publishing, and speaking professionally throughout North America since 1990.

They focus exclusively on retail, or wherever retail is involved. They work with CEOs, CFOs, boards and owners of retail operations, as well as manufacturers or wholesalers expanding into retail. And they also are Retail Turnaround Experts.

Since 1999, empowering retailers and store owners to "Turn on your financial headlights!"