Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to Axios Closer for insights into the day’s business news and trends and why they matter

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Stay on top of the latest market trends

Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Axios on your phone

Get breaking news and scoops on the go with the Axios app.

Download for free.

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

Retailers are under pressure to raise prices on a slew of everyday products. The problem: Americans have become too cheap to let them.

Why it matters: Our obsession with cheap stuff is tying the hands of some of the nation's biggest corporations — like Target, Macy's and Walmart — at a time when they're grappling with new tariffs and can't risk offending shoppers during the all-important holiday season.

Where it stands: While low unemployment and rising wages have been a boon, U.S. consumers are still worried about price increases — and retailers are scrambling for ways to avoid passing on tariff-related costs to their customers.

  • What they're saying: "Whether the consumer can afford to pay more doesn't matter," David French, senior vice president of government relations at the National Retail Federation, tells Axios. "The consumer is always going to be attracted to the lowest price ... retailers know this."

A few examples:

  • Macy’s attempted to pass along those tariff costs — making items like luggage, furniture and other household products more expensive — but the company faced consumer backlash and may reverse those hikes. There was “very little appetite for those cost increases,” CEO Jeff Gennette said in a recent call with Wall Street analysts.
  • Target is putting intense pressure on its suppliers that buy products from China to hold the line on prices. “Our expectation is that you will develop the appropriate contingency plans so that we don’t have to pass price increases along to our [customers],” Mark Tritton, Target's chief merchandising officer, wrote in a memo to suppliers.
  • Prices have ticked higher on some products at Walmart, but executives there say they view price increases as an absolute "last resort."

"We constantly want downward pressure on pricing ... And we'll pull all the other levers that we have to get there," Walmart's chief merchandising officer Steve Bratspies said this month at a Goldman Sachs retail conference.

Similarly, at Macy's, executives are looking at "mitigation strategies" to avoid raising prices again — even though the most recent round of tariffs, and the impending round, more directly target a range of consumer goods.

Apparel prices haven't gone up meaningfully in at least 7 years, according to the Bureau of Labor Statistics' consumer price index. For some items, like toys and cosmetics, prices have actually been trending lower.

  • “We’ve trained customers to be so cheap," Sucharita Kodali, a retail analyst at Forrester Research, tells Axios. “Amazon is a symptom of the consumer obsession with low prices,” not the cause.
  • Cheaper items are the result of more sourcing of goods from overseas, where production costs are lower.

But now, companies that rely heavily on parts or items from China are facing an unprecedented threat to decades-old supply chains. U.S. companies, which bear the cost of tariffs, are looking at ways to offset these big expenses.

  • Companies like Kohl's have lowered Wall Street's expectations for its profit margins — already pressured by other in-store promotions — as it tries to avoid any customer impact from tariffs.

The bottom line: Economists estimate the trade war could increase costs by hundreds of dollars for the average U.S. household. Companies trying to avoid price hikes aren't sure how long they can hold out if the trade war drags on — or, worse, intensifies.

Go deeper

California to pay off unpaid rent accrued during COVID-19 pandemic

California Gov. Gavin Newsom. Photo: Jay L. Clendenin / Los Angeles Times via Getty Images

California will pay off the accumulated unpaid rent that has piled up during the COVID-19 pandemic, the AP reports.

Why it matters: The move would fulfill a promise to landlords to help them to break even, while giving renters relief, the AP writes.

U.S. announces destinations for 55 million more COVID vaccine doses

President Biden at a press conference on the final day of the G7 summit. Photo: Brendan Smialowski/AFP via Getty Images

The Biden administration on Monday announced a list of countries that will receive the remaining 55 million COVID-19 vaccine doses that the U.S. has pledged to allocate by the end of this month.

The state of play: The White House had previously named the recipients of the first 25 million of the 80 million doses that the U.S. has pledged to export, as it took its first step toward becoming a global vaccine supplier.