A DISCOUNT warehouse and rival to Costco is plotting price hikes on 1,000 home essentials.
The chain is holding onto keeping prices as low as possible, but external economic pressure is starting to become too severe.
Summer is here, a time when most major retailer should sales events, but Sam’s Club is being forced to focus on something else.
The pressure is mounting as a result of Donald Trump‘s tariff policies, and now, the company is having to decide how to tackle it.
Sam’s Club‘s CFO Todd Sears has revealed the items most likely to be raised in price to offset the cost the tariffs will impose.
Sears has warned that price rises on at least some items are highly likely, and that nothing is off the table.
He said: “If we see those higher costs come in, certainly we have to take a look at all options.”
The retailer is currently caught in a balancing act, as it tries to weigh up the risk of raising prices on different items.
Typically, Sam’s Club sells more big-ticket items than Walmart does, and could boost prices on things like that.
Right now, Sam’s Cub is planning to focus price rises on discretionary products like air fryers, coffee makers and blenders.
Items like these are regarded as consumer luxuries, so essentials like food can stay at the same price.
Sam’s Club is not expecting any price hikes on food because it brings down its cost by improving packaging, and using less of it generally.
Sam’s Club has also outlined more than 1,000 popular summer products.
It is thought that these prices will be held until at least July 22, and will be followed by promotional deals from July 23 through August 17.
It includes items like 24-count beef hot dog packs, smashed burgers, cherry limeade and rotisserie chicken.
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The retailer also uses data and algorithms to forecast demand for fruits it relies on imports for, like pineapples and bananas.
What items will be affected by the tariffs?
AMERICANS should prepare to see significant prices changes on everything from avocados to cars under President Donald Trump’s new global tariffs.
Here is a list of some of the everyday products that could see a massive price tag surge.
- Coffee
- Tea
- Bananas
- Foreign-made cars
- Sneakers
- Furniture and other home goods
- Pharmaceuticals
- Video games
- Clothing
- Toys
- Washers and dryers
- Avocados
- Housing materials
There has also been an effort to better manage inventory to reduce the need for markdowns on older perishable goods.
Sam’s Club has also been able to use its relationship with Walmart to tap into its supply chain, allowing it to be more flexible when it comes to sourcing products.
Steven Shemesh, a senior equity research analyst at investment bank RBC Capital Markets, said: “Increasing prices is definitely a risk, but Sam’s Club, being under the Walmart umbrella, has many more tools to mitigate the impact of higher costs than a lot of other retailers out there.”
Sam’s Club may be facing similar pressures top Walmart for now, but the CFO has confirmed that it won’t necessarily raise prices in the same time frame.
For Sam’s Club, prices matter beyond even the immediate sales figures.
It aims to keep prices low as long as possible to help boost paid memberships that are generally required to shop in its stores.
Those membership fees fees generate 80% to 90% of its profit, Sam’s Club has said.
Sam’s Club’s CFO Todd Sears has revealed the items most likely to be raised in price to offset the cost the tariffs will impose[/caption]
