Target is making big moves regarding price hikes, but not without sounding the alarm.
In a no-nonsense message during the company’s Q1 earnings call, Target CEO Brian Cornell hit shoppers with a blunt three-word warning about price hikes: “Very last resort.”
Even though Target pulled in a massive $105.8 billion in sales in 2023, the retail powerhouse is feeling the heat from rising tariffs. The first quarter of 2025 wasn’t kind, sales dipped, foot traffic fell, and executives pointed the finger at those increasing trade pressures. Cornell’s warning isn’t just for drama. It’s real, and it could hit your wallet soon.
But Target isn’t folding. Alongside the price warning, the retailer dropped major news: it’s opening 20 new stores in 2025, adding to the three already opened this year in Surprise, Arizona; South Lake Tahoe, California; and Denton, Texas. That’s part of an ambitious plan to open more than 300 new stores in the next 10 years.
Target’s trying to stay ahead of the curve. The CEO emphasized that price increases would only happen if all other strategies fail. According to Cornell, Target is using every lever possible to avoid raising shelf prices. This includes tapping into its massive scale, long-term vendor partnerships, and flexible product assortment.
Target CCO Rick Gomez backed this up, revealing that the company is working hard behind the scenes to absorb the bulk of tariff-related costs. He highlighted how Target cut its product sourcing from China, from 60% in 2017 to 30% today, with a goal to hit under 25% by the end of 2026.
To make that happen, Target is switching up its sourcing strategy and changing its product mix, like adding trendy snacks, beverages, and beauty items to Bullseye’s Playground, all while keeping $1, $3, and $5 options intact for value-hunting shoppers.
But here’s the catch: even with all those efforts, price hikes are still possible.
During the call, Gomez outlined five strategies to offset tariffs:
- Negotiating with vendors
- Reevaluating assortment
- Changing countries of production
- Adjusting order timing
- And yes, adjusting prices if necessary
Target’s not alone in this. Walmart CEO Doug McMillon recently confirmed that prices at Walmart are going up, starting this month and continuing through the summer, because of the same trade war pressure. “Even at reduced levels, the higher tariffs will result in higher prices,” he admitted.
To help you see what’s on the line, here’s a breakdown of the everyday products that could get more expensive because of the tariffs:
| Product Category | Likely Impact |
|---|---|
| Coffee & Tea | Higher prices due to import cost |
| Bananas | Increased retail pricing |
| Foreign-made cars | Major price hikes expected |
| Sneakers | Prices may surge |
| Furniture & Home Goods | Notable cost increases |
| Pharmaceuticals | Likely to get more expensive |
| Video Games | Higher shelf prices |
| Clothing & Toys | More expensive for consumers |
| Washers & Dryers | Price tags could rise |
| Avocados | Could see major cost spikes |
| Housing Materials | Rising costs for building supply |
So while Target is holding the line for now, don’t be shocked if prices start creeping up across stores. The good news? Target’s massive scale and smart sourcing strategy give it more tools than most competitors to fight back. Still, if tariffs continue, those tools might not be enough.
And while prices may be a concern, Target’s clearly looking at the long game. Its new store openings and ongoing retail dominance show that it’s betting big on its future, even as it braces for short-term economic hits.
