Target CEO Brian Cornell Denies Price Gouging Accusations Amid Retail Industry Scrutiny
Target CEO Brian Cornell firmly dismissed accusations of price gouging in the retail sector during his appearance on CNBC’s “Squawk Box” on Wednesday. In response to recent claims that some grocers are inflating prices, Cornell emphasized that in the highly competitive retail industry, there is no room for price gouging. He stressed that retailers must remain responsive to customer needs or risk losing business.
Cornell addressed questions from dailynews91
Joe Kernen, who referenced Democratic presidential nominee Vice President Kamala Harris's proposal for a federal ban on corporate price gouging in the food and grocery sectors. Harris has claimed that certain companies are driving up household inflation through excessive pricing.
“We’re in a penny business,” Cornell remarked, highlighting the narrow profit margins typical in retail. He pointed out that consumers have numerous options for comparing prices, from physical stores to mobile apps that allow them to check prices across different retailers.
The CEO's comments come as Target reported earnings and revenue that surpassed Wall Street’s expectations. Despite a cautious outlook for the full year, Target expects comparable sales—excluding the effects of store openings and closures—to fall within a range of flat to a 2% increase. The company, however, raised its profit forecast, projecting adjusted earnings per share between $9 and $9.70, up from the previous forecast of $8.60 to $9.60.
Target and other retailers like Home Depot, Walmart, and Macy’s are facing consumer scrutiny over high prices and inflation. Cornell noted that Target is focused on appealing to budget-conscious consumers, stating that “value is in our DNA.” To address shopper concerns, Target has reduced prices on approximately 5,000 everyday items, including diapers and peanut butter, in an effort to boost traffic and sales.
The impact of these price reductions is evident, with Target seeing a 3% increase in customer traffic both in-store and online, although average basket sizes have decreased compared to the previous year. Meanwhile, Walmart CEO Doug McMillon mentioned that while prices have decreased in many categories, inflation remains persistent in areas like dry groceries and processed foods. He also highlighted Walmart’s ongoing efforts to negotiate lower prices with brands to counteract rising costs.