- Some companies already tell customers that they will have to increase prices due to Trump prices.
- At least one – Chipotle – said that he did not plan to transmit the cost to consumers
- The tariff announcement has become a key discussion point that companies must now consider.
I would like to officially announce that I will not transmit the cost of the prices to Business Insider newsletter readers today.
President Donald Trump’s taxes on Canadian, Mexican and Chinese products have absolutely no impact on my ability to produce the daily newsletter. (And it’s also free to subscribe.)
But do not let the details hinder a story of well-being: I am ready to wear the burden of these taxes for you, the reader.
My statement may seem silly (it is!), But there are undoubtedly serious conversations that take place in companies to communicate the impact of these new prices.
Some companies do not waste time clearly showing that customers will have to take it on the chin. The CEO of Target, Brian Cornell, said that certain grocery costs could increase this week, while Best Buy CEO, Coriry Barry, said that price increases on imported products are now “very likely”.
The two leaders were not too precise on their profits, but the message was clear: do not blame if we have to increase prices.
They are not alone. Large companies and small ones have telegraphed potential price increases due to prices for some time. Like the legendary investor, Warren Buffett, recently said about prices: “Over time, they are a tax on goods. I mean, the fairy of the teeth does not pay them!” (We have a complete overview of the products most sensitive to prices.)
But a company adopted a very different approach. Before Tuesday’s announcement, Chipotle said it was not Planning of the increase in its prices due to prices.
Chipotle CEO Scott Boatwright told “NBC Nightly News” that the chain planned to absorb any price increase.
“We are fortunate to have such an extraordinary economic model at Chipotle that we can resist these types of inflationary pressures and not have to transmit these costs to the consumer,” said Boatwright.
What a victory for the finance bros! You cannot tax these gains! I’m going to take the double meat And A little guac, please!
Oh, wait, there is still one thing.
Boatright continued to say that Chipotle could further increase prices if the cost of prices becomes a “significant front wind”.
Oh okay …
And the prices are not even ready to strike as hard chipotle. At least, according to Chipotle. The leaders previously played on the impact of prices on a recent call for results. Although Mexico has provided approximately 90% of lawyers eaten in the United States, according to CNBC, the chain only receives half of its supply from Mexico. And financial director Adam Rymer said the products he gets from our neighbors to the south represent only 2% of his sales.
Hmmm, okay.
Chipotle is also not philosophically opposed to the transmission of costs to customers. In fact, the chain literally did it. In December, Chipotle increased prices by 2% nationally to compensate for inflation, its first price increase in more than a year. The rise in prices also discussed the blow of its beneficiary margin which came with “coherent and generous parties”.
So, to summarize: a chain that says it is quite isolated from prices and has recently increased its prices will make its best so as not to increase prices on consumers. (But no promises.)
Siri, where is the nearest MOE?
To be fair to chipotle, the prices should cost the chain a few money. Rymer previously estimated that the prices on Mexico, Canada and China would increase its cost of sales – or how much it pays for the things it sells to you – by about 0.6%.
It’s not nothing, especially when fast food chains fought to reduce prices in the face of an uncertain economic future. Thus, Credit Chipotle for trying to avoid transmitting costs to customers rather than simply waving the white flag on the prices or using the commercial tax as a cover to increase its prices.
“Today we have our intention to hold constant prices because we do not know if the prices are transient, if they are permanent, or how they will have an impact on our business in the future.” Laurie Schalow, director of business affairs for Chipotle, told me by e-mail.
But just as some have said that Trump’s pricing plan was part of a greater negotiation tactic, do not be surprised if companies seek to borrow from the president’s book. The field button problem could be an excuse for companies to increase prices or the opportunity to boast that they hold the line to protect their customers.
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