Retail pricing

[RichardFlack]

The obvious debating point would be to ask how often retailers reduce prices when replacement costs go down.

I used to work at a store that priced off replacement cost, and we did this every time.

Yeah, every retail operation I know about prices this way. If costs go down, sometimes you’ll keep the higher price, but only if you think there is still value there.

Do they write down the inventory at the same time?

[lleichtman]

middle woman

You mean like a Ted-Kennedy/Chris-Dodd middle woman?

I thought this was supposed to be a family friendly board.

And not political

Well. tariffs are political. What else would you call them?

[John_Morris]

I actually own a business that was impacted by the tariffs since late 2018. 10% then to 25% increase from China in our industry. I think most of what you said is accurate. We raised our prices as soon as possible, but the market limited our ability to do so. As competitors raised slightly, we raised a little more. We were pretty intentional about trying to change “the market”. We would have never had this capacity if not for the tariffs, as they created a strong desire to raise prices by our competitors. If not for the tariff, competitors would have just held much lower and capitalized on increased sales. Point being is that preemptively increasing the price allows the company to take in new market data, since you know the old data is soon to have little relevance.

Thanks for the firsthand anecdote. The rest of us are just speculating/theorizing.

Did you increase your prices 10% and then an additional 25%? Were you worried about maintaining you percentage margin, or simply maintaining at least your existing dollar markup?

[David_Bu3ker]

You mean like a Ted-Kennedy/Chris-Dodd middle woman?

I thought this was supposed to be a family friendly board.

And not political

Well. tariffs are political. What else would you call them?

Yes, but not in Nathan’s twisted way.

[HoosJustinG]

It seems like T-W is assuming there is inelastic demand for BDX, and that price increases can be passed through 100% to customers. That may be true in the short run for some things that are irreplaceable - like gasoline or oil if you have an ICE care - but as time goes on people can adapt.

I’d posit this: most of the people who can buy $50 or $100 bottles of French tarriffed wine have enough wine already that they can sit out the trade war for a while, drinking down their stocks. Or in extrema, look at self importing, and perhaps dodging customs duty that way.

There’s a T-W coupon sitting on my kitchen counter too and I haven’t been in since the summer so I was thinking of swinging by this weekend. But maybe that just a waste of time if everything has just been marked up as Alfert observes.

By “self-importing” I suppose you mean bringing it back as a personal allowance as a tourist? How much can one bring back without being subject to customs/tariffs? IIRC, you have to “declare” anything you bought no matter how mundane, but last few flights home (IAD airport FWIW) I’ve never actually seen anyone go into the “customs” area. Surely most people coming home - even on work trips - bought some type of personal souvenir…

[Markus_S]

You mean like a Ted-Kennedy/Chris-Dodd middle woman?

I thought this was supposed to be a family friendly board.

And not political

Well. tariffs are political. What else would you call them?

Touché

[Markus_S]

And not political

Well. tariffs are political. What else would you call them?

Yes, but not in Nathan’s twisted way.

Is he “twisted”?

Or simply pulling our leg and hanging it out to dry?

[Brian_G_r_a_f_s_t_r_o_m]

Anyone noticed any price changes at CostCo? My guess is no but just wondering . . .

I affirmatively noticed a lack price increase on existing Costco stock. I was keeping my eye on the 2014 Pontet Canet, which stayed at its pre-tariffs price until.it was gone.

[DougS]

The obvious debating point would be to ask how often retailers reduce prices when replacement costs go down.

I used to work at a store that priced off replacement cost, and we did this every time.

Yeah, every retail operation I know about prices this way. If costs go down, sometimes you’ll keep the higher price, but only if you think there is still value there.

Right, and competitive pricing, which is why that owner did this. I didn’t price this way as a wine manager, but I was very aware of the market, which often meant taking very low markups on items that were widely available or had gone through pricing changes at the wholesale level.

[lleichtman]

Our local wine shops have passed on the first tarif but are sitting on their hands right now waiting to see if the second one even goes in. All of them tell me their businesses are in danger if there is a 100% tarif.

[Yao_C]

By “self-importing” I suppose you mean bringing it back as a personal allowance as a tourist? How much can one bring back without being subject to customs/tariffs? IIRC, you have to “declare” anything you bought no matter how mundane, but last few flights home (IAD airport FWIW) I’ve never actually seen anyone go into the “customs” area. Surely most people coming home - even on work trips - bought some type of personal souvenir…

I don’t believe there is a fixed limit that’s been defined. As long as it’s a small-ish amount and clearly not being brought in to be re-sold they won’t mind. Last time I was in France I brought back 9 or 10 bottles, told Customs about it, and they just waved me through