Retailers, including Target CEO, meet with Trump to discuss tariffs

President Donald Trump met with top American retailers Monday to discuss the impact of tariffs on their businesses.

The meeting took place at the White House and included Target CEO Brian Cornell, Walmart CEO Doug McMillon and Home Depot CEO Ted Decker.

“We had a productive meeting with President Trump and our retail peers to discuss the path forward on trade, and we remain committed to delivering value for American consumers,” Target said in a statement to CNBC.

In a fourth quarter earnings call, Rick Gomez, chief commercial officer for Target, said 30% of the company’s owned brand production comes from China. This is down from 60% in 2017.

Target executives said the company is continuing to diversify its countries of production, including from the Western Hemisphere, Guatemala and Honduras. It’s also negotiating with vendors to reduce the cost passed onto consumers, Gomez said.

Target executives are predicting flat comparable sales for the year and decreased profit margins for the current quarter.

The company is especially affected by consumer uncertainty because of its focus on discretionary spending. Nearly 60% of Target’s total merchandise sales were on nonessential goods like beauty, apparel and home furnishings.

“The immediate implementation of these tariffs is a massive undertaking and requires both advance notice and substantial preparation by the millions of U.S. businesses that will be directly impacted,” said David French, executive vice president of government relations for the National Retail Federation (NRF).

The NRF acts as Target’s and several other retailers’ lobbying arm in Washington, D.C.

Tariffs add to the growing list of threats retailers are facing. Both Walmart and Target saw a decrease in foot traffic for February and March, according to data from Placer.ai. The most recent report for the week of April 7 shows a 4.7% drop in Target’s foot traffic. Walmart saw a 2.7% increase compared with the previous year.

The Minneapolis-based retailer has faced calls for boycotts from activists. Cornell met with the Rev. Al Sharpton last Thursday to discuss Target’s decision in January to roll back its DEI efforts. In a statement provided by the National Action Network, Sharpton said the meeting was “very constructive and candid.”

The retailer is going on 11 consecutive weeks of reduced foot traffic, year over year, according to Placer.ai. Retail consultant Liza Amlani previously said retailers and consumers are experiencing a “perfect storm” of contributing factors.

Analysts say the decline in foot traffic is most likely a result of the economic uncertainty since Trump took office. But Target has also been experiencing issues with inventory, staffing and store cleanliness.

Anne Mezzenga, co-CEO of Omni Talk, previously said the Minneapolis-based retailer will have to reinvest in its brand identity, curated product assortment and focus on design to regain customer loyalty.