• Target said reactions to its DEI moves adversely impacted first-quarter sales.
• Protesters say they're not satisfied with the company's response so far.
• Additional protests are planned for May 25, the fifth anniversary of the murder of George Floyd.

Target is having little success in convincing shoppers of its stance on DEI.

CEO Brian Cornell said Wednesday that public response to changes to its DEI programs — now known as "Belonging" — adversely impacted first-quarter sales, although an exact amount was not quantifiable.

"We faced several additional headwinds this quarter, including five consecutive months of declining consumer confidence, uncertainty regarding the impact of potential tariffs, and the reaction to the updates we shared on Belonging in January," he said.

The financial results follow weeks of declining foot traffic and sales, punctuated by seasonal holiday bumps during the period. But shifting positions on DEI issues don't appear to doing Target any favors, Global Data retail analyst Neil Saunders said in a note.

"The extent of this should not be overstated as many other factors are driving down Target's sales numbers, but the move has certainly not been helpful," he said.

A Target spokesperson said in a statement to Business Insider that the company is "absolutely dedicated to fostering inclusivity for everyone — our team members, our guests and our supply partners."

"To do that, we're focusing on what we do best: providing the best retail experience for the more than 2,000 communities we're proud to serve," the spokesperson said.

While some supporters of DEI have claimed partial victory in their pressure campaign, leaders including pastor Jamal-Harrison Bryant say they're not yet satisfied with the company's response.

Bryant said his church would hold a protest in front of an Atlanta-area Target on Sunday, May 25, to mark the fifth anniversary of the murder of George Floyd in Target's hometown of Minneapolis.

"We're gonna do it for nine minutes and 40 seconds as the same amount of time they applied pressure to George Floyd that led to his death," Bryant said in a video inviting other churches to join.

Target expanded several diversity initiatives in the immediate aftermath of Floyd's murder, and CEO Brian Cornell said the incident highlighted that more work was needed.

"It happened only blocks from our headquarters," Cornell told the Economic Club of Chicago a year after Floyd's death. "My first reaction watching on TV was that could have been one of my Target team members."

At the time, Target committed to spending more than $2 billion on Black-owned businesses by 2025 by purchasing goods from more than 500 Black-owned businesses and contracting with Black-owned services from marketing to construction.

"As CEOs we have to be the company's head of diversity and inclusion," Cornell told the Economic Club of Chicago. "We've got to make sure that we represent our company principles, our values, our company purpose on the issues that are important to our teams."

Four years later, Target's message on DEI is less clear.

In January, the company said it was rolling back several diversity initiatives, renaming others, and not renewing the spending and sourcing goals it set in 2021.

(Target's spokesperson told BI the announcement did not affect existing brand or supplier relationships, and that the company still recruits from a range of schools, including HBCUs.)

Target also for the first time donated $1 million to President Donald Trump's inauguration fund, filings showed, even as Trump was gearing up executive orders to strip DEI programs from federal agencies and contractors. Tech giants Google, Meta, and Uber also each donated the same amount.

In addition, the company has drastically shrunk its annual LGBTQ Pride collection in recent years, and now offers a small fraction of what it showcased a two years ago.

In a note to employees earlier this month, Cornell acknowledged that "silence from us has created uncertainty," and the executive has reportedly met with Bryant and Reverend Al Sharpton to discuss a path forward.

Beyond the protests, Saunders said Target continues to face a myriad of other challenges, including still-high tariffs on imports, growing competitive pressures from rivals, and a host of other operational difficulties.

"This year will be another soft one and Target enters it in a relatively weak position," he said.

• Target reported sliding sales in its first quarter to May 3.
• CEO Brian Cornell said sales "fell short of our expectations" in a "highly challenging environment."
• Cornell also said post-tariff price increases would be a "last resort."

Target sales fell sharply in the three months to May 3, in a period marked by its decision to roll back DEI initiatives in January.

In an earnings call Wednesday, Target CEO Brian Cornell said the reaction to the DEI changes was one of several "additional headwinds" that had an adverse impact on sales, but the company could not quantify the amount.

Business Insider reported in March that the consumer analytics firm Numerator found customer foot traffic and market share had shifted from Target to Costco, particularly among shoppers who value DEI.

With respect to tariffs, Rick Gomez, Target's chief commercial officer, said on the earnings call that "adjusting prices" was one of several steps the company was taking to manage new import costs.

Comparable sales fell by 3.8%, store traffic was down 2.4%, and the average transaction size decreased by 1.4%.

Store-originated sales declined 5.7%, but were partially offset by a 4.7% growth in digital sales, led by a 36% surge in same-day delivery via Target Circle 360.

"We have many levers to use in mitigating the impact of tariffs and price is the very last resort," Cornell said.

Some alternatives to price hikes include sourcing more products from the US rather than China, negotiating with suppliers, adjusting the timing of deliveries, and eliminating products from the retail assortment, Gomez said.

Bullseye's Playground vow

Gomez also said that about half of the products Target sells are sourced in the US, and that it's on track to reduce its share of imports from China to 25% from the 60% share it imported in 2017.

In addition, he highlighted the low-price section at the front of the store, known as Bullseye's Playground.

"We have made a commitment to keep those at $1, $3, and $5," Gomez said. "It's important to the brand, and it's important to the guests."

Looking ahead, Target said it expects a low-single-digit decline in sales for the full year.

Stock fell more than 6% in premarket trading and was down 28% this year at Tuesday's close.

It also announced an "acceleration office" led by Michael Fiddelke, the company's former CFO and current COO, aimed at speeding up strategic execution and reversing recent declines.

Amy Tu, the chief legal and compliance officer, and Christina Henningon, the chief strategy and growth officer, are both leaving the company.

Net income rose by $62 million to $1.04 billion for the period.

• Walmart said last week that it planned to raise prices over tariffs, opening the door for other retailers to follow suit.
• On Tuesday, Home Depot said it didn't plan to increase prices and would instead rely on other "levers."
• Here's why the two companies are looking at the new import costs differently.

Retail giants Walmart and Home Depot are sending conflicting signals about post-tariff prices.

Walmart said during its earnings report last week that it would raise prices in the coming weeks and months — a move that also opened the door for other retailers to act.

But on Tuesday, Home Depot said it didn't plan to follow suit and would instead rely on other "levers" to manage expenses without broad-based price adjustments.

A closer look reveals four factors likely contributing to why the two companies are approaching pricing differently as they navigate new import costs.

Home Depot has more room to work with

Home Depot operates with wider profit margins than Walmart does, which means it has more flexibility to absorb any tariff-related costs.

Home Depot reported gross margins of 33.4% in the first quarter, compared to 27.5% in Walmart's US segment.

In other words, Walmart's markup is about six percentage points lower than Home Depot's, which makes sense given the different kinds of products each retailer specializes in. Higher-priced items like power tools and home appliances typically have higher profit margins than food and apparel.

Shoppers depend on Walmart for low-priced groceries

While Walmart is America's undisputed grocery king, Home Depot doesn't sell much food.

Sure, you can pick up a snack bar and a drink at the Home Depot checkout lane, but that's not the company's main category. By contrast, roughly 60% of Walmart's sales are from the food and beverage aisles.

This matters because many US shoppers have grown frustrated at inflation driving their grocery bills up, so Walmart has effectively ruled out, for now, using food price hikes to offset new costs for imported products.

"The first thing that goes through my mind is food inflation," Walmart CEO Doug McMillon said. "We've been through a number of years here where prices have gone up on food, and our customers have felt that, and they don't want any more food inflation."

For Home Depot, there's a bit more flexibility about where the company can shift costs, make some strategic pricing decisions, or make outright product cuts.

"We'll continue to use the portfolio approach that we've talked a lot about in the past, but we don't see broad-based price increases for our customers at all going forward," Home Depot's head of merchandising, Billy Bastek, said during Tuesday's call.

Walmart depends more on China

Home Depot says half of its inventory was sourced from within the US, and the company says no single country will represent more than 10% of its supply base by this time next year.

Walmart sources two-thirds of the products it sells in the US from US suppliers. A 2023 Reuters report found, though, that the company depends on China for about 60% of its imports.

While Walmart may have made tweaks to its supply chain since then, taken together, those figures would indicate Walmart has a higher exposure than Home Depot does to the 30% additional tariffs on Chinese imports, which Walmart CFO John David Rainey described as "too high."

Home Depot has more exclusive brand partnerships

Home Depot also said during the earnings call Tuesday that it plans to enlist its partner brands in its efforts to hold the line on prices for shoppers.

As avid DIYers or pro remodelers know, there are certain brands that are only available at a given national chain, so if Milwaukee Tool wants its products' sales to outperform Bosch's, it would behoove the brand to help Home Depot keep prices lower than chief retail rival Lowe's.

"It's a great opportunity for us to take share, and it's a great opportunity for our suppliers to take share as well," Bastek said.

Walmart, by contrast, is a mass retailer, which means it sells many of the same national brands that Target, Costco, or any other large company carries — so there's less incentive for, say, Energizer or Duracell to offer a better deal on batteries.

Companies have choices to make

Although President Donald Trump has said he would prefer that retailers simply "eat the tariffs," there aren't any set rules about how companies have to handle the new costs on imports.

Still, it would appear that Home Depot has a bit more flexibility than Walmart has to keep prices stable and still turn a profit.

As more companies report their earnings in the coming days and weeks, analysts will be sure to probe which path other retailers say they'll follow.

Do you work at Target or Walmart? Contact the reporter from a non-work device and email at [email protected]

• Home Depot said it would maintain pricing levels despite the impact of tariffs.
• The CFO cited strong supplier ties and productivity for the move.
• The retailer posted a rise in first-quarter sales, while earnings dipped.

Home Depot said it had no plans to pass on the cost of tariffs to consumers despite their financial impact.

"We intend to generally maintain pricing across our portfolio," the home improvement retailer's head of merchandising, Billy Bastek, said during Tuesday's earnings call. "We don't see broad-based price increases for our customers at all going forward."

Executives said on the call that half of Home Depot's inventory was sourced from within the US, and that no single country will represent more than 10% of its supply base by this time next year.

"We have a number of different levers," Bastek added.

Speaking earlier to CNBC, CFO Richard McPhail cited the retailer's scale, close partnerships with suppliers, and supply chain productivity as key factors enabling it to absorb rising costs.

Bastek said on the earnings call that maintaining prices could help Home Depot (and its supplier brands) take market share from competitors that end up charging more.

The comments follow Walmart's announcement that it would raise prices in the coming weeks in response to the financial impact of President Donald Trump's tariffs.

Retail analysts told Business Insider that Walmart's move gave other retailers air cover to follow suit, if they so choose.

McPhail's comments come as Home Depot posted a 9.4% rise in first-quarter sales to $39.9 billion, although comparable sales fell by 0.6% due to the impact of foreign exchange rates.

Net earnings fell $200 million to $3.4 billion compared with the same period last year.

CEO Ted Decker said in a statement that the first-quarter results were in line with expectations.

"We feel great about our store readiness and product assortment as spring continues to break across the country," he said.

Home Depot maintained its full-year guidance of a 2.8% rise in total sales and an approximately 1% increase for comparable sales.

The stock rose 0.3% in afternoon trading and is down 2% this year.

• Trump's tariff reversal on Chinese goods has complicated the math for US importers.
• A week ago, delaying duty payments seemed smart — now, it may make sense to pay early.
• And then there's the issue of what to do with the surges of arriving inventory.

Just when US importers were starting to make sense of President Donald Trump's 145% tariffs on Chinese goods, the negotiator-in-chief changed the deal again.

Now, with the plans on pause and current import tariffs dropping down from 145% to 30% for China, importers are having to rethink how — and when — they bring goods into the US, according to Ben Dean, VP at warehousing network Flexe.

Tariffs are indeed a lot lower than they were last week, but they're still far higher than they have been for years, and there's no clear answers about which way they'll go in the next 90 days or beyond.

All of that has importers looking at an even wider menu of warehousing and transportation options than they were just a short while ago — if they're not biting the bullet and paying the tariffs outright.

Before Monday's announcement, the 145% tariffs on Chinese goods made for rather simple (if unpleasant) decision-making, since they were so high they effectively blocked all but the most essential products from crossing the Pacific.

For goods that were already en route, many businesses turned to a specialized type of storage facility, known as a bonded warehouse. These facilities allow importers to park their goods duty-free for up to five years, and only pay the tariff charge that is in effect at the time they accept their inventory.

"By holding the goods under bond, there's the possibility that they might pay at a lower rate," Dean said in a previous interview with Business Insider.

In a follow-up interview after the tariffs fell to 30%, Dean told BI that, as expected, interest in bonded warehousing has fallen precipitously — though not entirely.

Now, he said there's more interest in foreign-trade zones.

FTZs are somewhat similar to bonded facilities in the sense that they allow importers to delay payment of tariffs, but the key difference is that FTZ lock in the tariff rate at the time of arrival, rather than when the items leave the facility and officially enter the US.

"Should we not make progress on a formal agreement and in 91 days, rates shoot up again, that is a risk," Dean said.

At least now, "there's an upside risk, which we didn't have" before, he said.

Dean also said demand is up for trains and short-haul trucks, while long-haul trucking rates are comparatively down — an indication importers are trying to slow the roll of previously rushed inventory.

"The need for speed has gone away, and slower and more economical transportation modes are now coming into high demand," he said.

In other words, importers who brought inventory in ahead of tariffs are using the country's hundreds of miles of train tracks instead of actual warehouses to effectively hold their merchandise until it comes time to sell it.

For the impending surge of new shipments — container bookings are up nearly 300% between the US and China this week — Dean said there is ample warehouse capacity to receive it.

"The ports are trying to get their things in order to make sure that that surge can get off the ship," he said. "And everybody's seeking to avoid any kind of headline event like we had off the Port of Long Beach during the peak of COVID," when massive backlogs on the docks kept container ships lingering at anchor for weeks.

Even so, there could still be some capacity challenges at the West Coast ports in the coming weeks.

"We are — in real time — changing the economics of the cost of inventory," Dean said. "We're getting this real pilot to see what happens to our supply chain domestically when that happens."

• Walmart will soon offer delivery in three-hours or less to 95% of the US population.
• Its delivery business is also profitable for the first time, executives said on Thursday.
• The retailer has spent billions beefing up its e-commerce operations to take on Amazon.

Walmart's big bet on delivery is finally starting to pay off.

After years of effort and billions of dollars, the retailer is on the verge of being able to deliver to 95% of the US population within three hours, CEO Doug McMillon said during the company's first-quarter earnings call on Thursday.

That's faster than Amazon (though Walmart's selection of products available for such speedy delivery is smaller).

Not only is its delivery reach getting wider, the company handled nearly twice as many three-hour deliveries last quarter as it did a year ago, helping its e-commerce business to post a quarterly profit for the first time.

Overall, Walmart is now handling a lot more packages through its delivery network than it did a few years ago — something that CFO John David Rainey called "densification."

"Think about the opportunity to deliver a package to five houses on the street versus one house on the street," Rainey said. "As we grow, we continue to spread those costs over more volume."

Many Walmart customers are also willing to pay to get their purchases delivered within a few hours, Rainey added. Walmart already offers fast delivery on groceries, for instance, through its Walmart+ paid subscription program. Other shoppers can pay a fee between $7.95 and $9.95 for at least $35 worth of groceries.

Retail tends to be a low-margin business. Turning a profit on delivery can be even more challenging.

But Walmart is starting with something that few competitors have: a sprawling fleet of more than 4,600 stores that are stocked with tens of thousands of items.

From there, Walmart has made further investments over the past several years, including specialized fulfillment centers, remodeled retail stores, and an increasingly automated supply chain to keep inventory flowing.

The company has also built — and redesigned — a suite of apps for customers, workers, and Spark delivery drivers to make ordering and fulfilling more convenient.

More recently, the company has been selling warehousing and delivery muscle to other businesses, as well as a growing (and highly profitable) advertising sales business.

Those revenue streams help Walmart keep delivery speeds fast and costs low while earning money for the company.

All of it adds up to an ever more efficient delivery operation that the company says was able to deliver last-minute bouquets of fresh flowers to customers on Easter and Mother's Day — and presumably some chocolates too.

"It shows the relevance of convenience," Rainey said.

Do you work for Walmart Spark or another gig delivery service and have a story idea to share? Reach out to this reporter at [email protected].

• Walmart says tariffs remain "too high," even after recent reductions.
• The company said it would have to raise some prices if import costs didn't come down further.
• It's not yet clear how already-pressured shoppers would respond to price hikes.

President Donald Trump's shifting trade policy is causing headaches for America's largest retailer.

While Walmart CFO John David Rainey welcomed the recent reduction in tariffs, he said the company was not out of the woods yet.

"Let me emphasize, we still think that's too high," he said of the latest rates during Walmart's earnings call on Thursday.

Walmart says it imports about one-third of what it sells in the US from other countries, namely China, Mexico, Canada, Vietnam, and India, and that cargo is flowing.

"There are certain items, certain categories of merchandise, that we're dependent upon to import from other countries, and prices of those things are likely going to go up, and that's not good for consumers," Rainey said.

Rainey added that shoppers were showing signs of being more financially pressured, evidenced by their spending shifting away from general merchandise and more toward food and essentials.

Walmart CEO Doug McMillon added that he didn't think shoppers would tolerate additional price hikes on their grocery bills, which would limit the retailer's ability to shift import costs to other goods in its assortment.

"The first thing that goes through my mind is food inflation," he said. "We've been through a number of years here where prices have gone up on food, and our customers have felt that, and they don't want any more food inflation."

He also said he was hopeful that any long-term policy would address foods that the US doesn't produce in significant amounts, like bananas.

An additional wrinkle for Walmart management is the question of what economists call "price elasticity," or the change in purchasing patterns in response to changes in cost.

American consumers proved resilient during recent years of high inflation and kept on spending even though prices were climbing.

But Rainey said tariffs make it "more challenging to anticipate demand by item," since it's not clear how shoppers would respond to new tariff-related price hikes and retailers are wary of getting stuck holding large amounts of expensive merchandise.

"We'll watch where our price gaps are," McMillon said, "but we'll also watch what customers are telling us and the response that we get from pressure that they're feeling."

While that puzzle is a little more solvable with high-turnover items like food, it's considerably more difficult to predict for seasonal sales events like back-to-school shopping or the holidays — and Walmart has to place those orders now.

And thanks to a quirk of retail accounting, a significant fluctuation in shelf prices could have an outsize impact on the company's financial results in the coming quarters if it has to make large adjustments to its inventory valuation.

"How do you make a quantity call, and what tariff number do you use?" McMillon said.

• Walmart reported first-quarter revenues of $168 billion, up 4% from last year.
• US sales were boosted by shoppers rushing to get ahead of tariff-related price hikes.
• Walmart's CFO said customers should expect price rises soon.

Walmart's strong first quarter underscores that the retailer views tough times as an opportunity.

It reported first-quarter revenues of $168 billion, up 4% from last year on a constant currency basis, and a 3% rise in profit to $7.3 billion.

"We delivered a solid first quarter in a dynamic operating environment. We're serving customers and members in more ways, which is fueling our growth," CEO Doug McMillon said in the earnings release.

US sales were lifted by shoppers rushing to get ahead of potential price hikes related to new tariffs on China and other countries announced during the quarter.

Year-over-year foot traffic to Walmart stores was up an estimated 4.5% in April, after being down in February and March, likely due to shopper concerns about prices and supply constraints, according to Placer.ai.

The stock rose 2.6% in premarket trading.

In an interview with CNBC after the earnings were released, Walmart's CFO John David Rainey said shoppers should expect higher prices in the near future.

"We're wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb," he said.

"It's more than any supplier can absorb. And so I'm concerned that the consumer is going to start seeing higher prices. You'll begin to see that, likely towards the tail end of this month, and then certainly much more in June."

Walmart also reported major growth in revenue from its membership programs, with global membership fee income up nearly 15%. The company doesn't disclose publicly how many Plus members it has, but it is estimated at more than 15 million, according to Barclays.

CEO Doug McMillon gave a preview of the results in early April at Walmart's investor meeting, shortly after President Donald Trump ratcheted up tariffs on imports from China.

McMillon said that two-thirds of what Walmart sells in the US is sourced domestically, and said the retailer's broad product assortment and experienced merchandising teams were well-suited to handle the uncertainty.

"We'll just manage it in a way that mix becomes a strength," he said.

In addition, CFO John David Rainey said at the time that fluid situations like this one have historically seen Walmart win customers over from rival retailers.

"If you look back two years ago when we saw inflation, we invited a lot of new customers to Walmart," he said. "We have a similar opportunity today."

• Slate Auto says more than 100,000 people have reserved one of its low-frills electric trucks.
• The ultracustomizable EVs are expected to start at about $25,000, with deliveries in late 2026.
• By comparison, the Cybertruck launch in 2019 nabbed 250,000 reservations in less than a week.

It's looking like the utilitarian Slate EV pickup truck has struck a chord.

The Michigan-based Slate Auto, backed by Jeff Bezos, says more than 100,000 people have reserved one of its low-frills electric trucks in the three weeks since it was unveiled.

Those numbers aren't bad, especially for a fledgling company with little brand awareness.

By comparison, Tesla's blockbuster Cybertruck launch in 2019 nabbed 250,000 reservations in less than a week (five years later, about 50,000 have been delivered, a March 20 recall filing said), and Rivian's CEO said his company pulled in more than 68,000 reservations in the first 24 hours after announcing the new R2 last year.

Slate's ultracustomizable electric trucks are expected to start at $25,000 for models that eschew such niceties as power windows, a radio, and an entertainment system. If applicable, electric vehicle tax credits could bring the final cost to below $20,000. Deliveries are expected to begin in late 2026.

Slate's more traditional, minimalist truck design, specs, and low price have some calling it the "anti-Cybertruck," and other automakers are also betting that car buyers are looking for something more practical — and affordable — than Tesla's sci-fi-inspired pickup.

Look no further than the new (and rather awkwardly named) ID. Every1, a $22,500 hatchback from Rivian and Volkswagen that aims to prove EVs can be both cheap and high-tech. It's expected to go on sale in Europe by 2027. The company hasn't said whether a US launch is planned.

"We would like to enable choice for customers but without such severe compromise in terms of the overall experience," Rivian's chief software officer, Wassym Bensaid, told Business Insider.

Tesla, meanwhile, is working on "more affordable" models of its cars, which it recently said are on track to be announced in the first half of this year.

While Slate's 100,000 reservations indicate healthy interest in the lower-cost pickup, it's important to note that refundable reservations often don't translate one-to-one into sales, and final pricing for Slate's truck has yet to be announced.

But CEO Chris Barman said last month that there are a lot of people out there like her who are nostalgic for a simpler way to haul themselves and their stuff around.

"My first car was a 1984 Ford Ranger pickup, with a five-speed manual, manual windows, and no air conditioning," Barman said. "It was basic transportation, but I loved the freedom it gave me to go places and do things."

• Target's former diversity chief said the retailer didn't walk away from DEI, "they trained it."
• Caroline Wanga, now CEO of Essence, said diversity programs are initially about measurable goals.
• "Eventually the goal goes away because the behavior is embedded and you pick the next thing," she said.

Target's former chief diversity officer is weighing in on the backlash the retailer has faced over its rollback of DEI policies.

Caroline Wanga, who left Target in 2020 and is now CEO of Essence, told NBC's Today show on Friday that Target "didn't walk away from DEI. They trained it."

"If you do this thing right, you create a way that gives goals that can be measured to incent people into the behavior," she said. "Eventually the goal goes away because the behavior is embedded and you pick the next thing."

Target did not immediately respond to Business Insider's request for comment.

Wanga's comments come days after CEO Brian Cornell sent an email to employees, according to the Minneapolis Star Tribune, acknowledging that "silence from us has created uncertainty" about where Target stands on inclusivity.

"We are still the Target you know and believe in — a company that welcomes all and aims to bring joy to everyone, every day," Cornell said.

Target has found itself in the cultural crosshairs multiple times in recent years, and has more recently responded to conservative criticism by shrinking initiatives, like its annual LGBTQ Pride collection, or ending others, like its official DEI program.

That response has, in turn, angered some groups who want the retailer to defend a more progressive and inclusive vision of American retail, sparking boycotts and declining foot traffic in recent months.

But Wanga said the fight over DEI as a label is more of a distraction than real substance.

"Do the work, leave the letters," she said.

"The work is still the same, " she added later. "We allow ourselves to be distracted in the things that are easy to argue about, because the work is harder."

• Several precious metal listings on Costco's website have had transaction limits tightened this year.
• Even with earlier restrictions, the company said its inventory sold out "within a few hours."
• Gold prices have reached record highs, and Costco has been a popular source for new collectors.

Sometimes things are a little too popular.

That certainly appears to be the case for Costco's gold bars. The wholesale club has been gradually tightening (and clarifying) the transaction limits on some of its precious metals products.

Where shoppers on Costco.com could originally purchase two one-ounce gold bars per transaction, they can now buy just one at a time.

And last year, Business Insider visited a warehouse in Wisconsin where shoppers could bring home a stack of five one-ounce bars.

Jumbo 100-gram bars are also now limited to one online, down from five a year ago.

The language on the product listing pages also better clarifies that "per day" in fact means within a 24-hour period — a distinction that previously had some social media users complaining about canceled orders.

Costco often uses item quantity limits for products where it anticipates strong demand for a sharp deal. An analysis of Costco's pricing strategy found the company sells gold for a scant 0.8% to 2.4% markup on average over the metal's spot price.

And even with earlier restrictions in place, the company said its inventory sold out "within a few hours."

The company did not immediately respond to Business a request for comment from Business Insider about the reason behind the tightened restrictions.

Beyond the price of the precious metal, which topped $3,400 per ounce last week, gold's popularity has surged at Costco, where novice collectors are drawn to the club's ironclad reputation for trustworthiness. One even characterized the club as a "gateway drug" to gold investing.

Some commenters welcomed the increased restrictions in discussion threads on the CostcoPM (precious metals) forum on Reddit.

"Good, they should limit to 1. Screw the flippers and bots," one Reddit user said. "It was getting near impossible to buy lately with the bots buying up all the inventory within a few minutes."

Other users pointed out that gold sales aren't about making a profit for Costco, they're about attracting and rewarding members, so it makes sense to allow more members to have a real chance at buying bullion. 

• Afina founder Ramon van Meer wanted to see if people would buy a Made-in-USA version of his specialty shower head.
• He found it would cost three times as much to produce — and raised the sale price by 85%.
• After several days of testing, a total of zero customers bought the USA model.

As a small business owner, Ramon van Meer said he's used to hearing people say they'd be willing to pay more for products made in America.

When President Donald Trump ratcheted up tariffs on Chinese imports by an additional 145%, van Meer decided to see if shoppers would put their money where their mouth is.

"I wanted to know the answer and then use it for my own company," the Afina founder told Business Insider.

So the serial entrepreneur set about finding US suppliers to make his best-selling product: a specialized filtered shower head.

Van Meer said his filters are made in the US, some additional materials are sourced in Vietnam, and the final product is made in China with a single supplier.

To move everything over to the US, he said he had to find four to six separate suppliers who would handle various aspects of the production process. All told, he found it would cost three times as much to produce — more than the cost of simply paying the tariff.

Armed with real numbers, he set out to do a test with two identical products, with the only difference being their origin and, critically, their price: visitors to Afina's website were presented with the option of a Chinese-made item for $129 or a US-made version for $239.

"I'm big on just testing it out with real data and real purchases," van Meer said. "Not asking customers, not a survey, not even add-to-carts."

"When somebody has to pay for it, that's the actual real data," he added.

After several days and more than 25,000 visitors, he said he sold 584 of the lower-priced shower heads and not one single purchase of a US-made version.

In a blog post that went viral, van Meer called the results "sobering."

"We wanted to believe customers would back American labor with their dollars. But when faced with a real decision — not a survey or a comment section — they didn't," he wrote.

Nowadays van Meer said he's spending most of his time trying to shift production out of China to a country with a lower tariff rate.

"Staying in China is not sustainable because even if they make a deal, we don't know what's going to happen," he said. "The United States is also not an option, because there's just no facilities that can make it."

Van Meer said Afina currently has enough inventory in its US warehouses to last until August, at which point he would have to start charging for the tariff.

Asked whether he would roll that cost into the price or apply a surcharge, as other businesses have said they would do, van Meer said he hadn't yet decided.

"We'll probably do testing," he said.

• A US labor judge has decided against Costco in a matter involving worker confidentiality agreements.
• The case involves a worker who had to agree not to discuss an internal sexual harassment investigation.
• The NLRB argued that Costco's policy "appears to instead protect the harasser."

Costco's policies surrounding internal investigations are under scrutiny for being "overly broad" and in violation of employees' rights.

On Monday, US National Labor Relations Board judge Andrew Gollin decided against Costco in a matter involving the confidentiality agreements that workers are expected to sign when raising issues with management.

The specific case was brought on behalf of Jessica Georg, who in 2022 used Costco's "Open Door" policy to file an internal complaint that she was sexually harassed by a co-worker, according to filings.

As part of the process, Georg was required to sign a confidentiality agreement that barred her from discussing the open matter with coworkers. She later received a letter from Costco that said the employee was fired, the case was closed, and that "we hope and expect" that the information would continue to remain confidential, according to filings.

The NLRB and Georg each declined to comment for this story, and neither Costco nor its attorney responded to Business Insider's request.

In a briefing, Costco's lawyer Paul Galligan argued that the confidentiality rules are intended to protect the integrity of the investigation and are in the shared interest of the company and workers.

"It helps employees to be candid in their statements knowing that their statements will be treated confidentiality. It is probably more critical in an industry like retail where employees work closely together," Galligan said.

He also said in the briefing the rules aren't intended to dissuade employees from discussing things like wages, working conditions, or forming a union.

But Costco's investigation found that the individual about whom Georg complained also had several prior complaints filed against him, and Georg later testified she felt she or her coworkers with similar experiences felt they might be risking their jobs if they shared information about alleged patterns of behavior by an individual employee about whom they had raised concerns.

A more tailored confidentiality agreement could still protect sensitive information while still assuring workers of their rights to protect themselves against harassment, the NLRB attorneys said in a brief.

The NLRB attorneys argued that Costco's policy "appears to instead protect the harasser who has had individual complaints dismissed over and over, because no one outside the investigator is privy to the serial nature of the harassment."

Costco's lawyer argued that the company's employee handbook explains that the confidentiality requirement is not intended to discourage workers from exercising their rights. The NLRB argued, and the judge agreed, that having workers sign a separate form (as was the case here) could reasonably cause confusion for a typical worker and lead them to fear for their job.

Part of Judge Gollin's proposed remedy is that Costco post a notice in the one warehouse where the violation occurred, since the NLRB did not prove conclusively that similar confidentiality forms were used at all of the company's US locations.

The case now heads to the NLRB's board, with exceptions to the decision due by June 2.

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• Amazon's latest Vulcan robot is the company's first system that can sense touch.
• The devices can reach places where workers would ordinarily have to bend or climb a step-ladder.
• Amazon says fulfillment centers will still need human workers, especially for higher-tech roles.

Amazon warehouse workers' newest high-tech colleague has a sensitive side.

The e-commerce giant's latest robot, named Vulcan, is its first system that can sense touch, enabling it to handle a wider selection of oddly shaped items than older models.

"In the past, when industrial robots have unexpected contact, they either emergency stop or smash through that contact," Amazon director of applied science Aaron Parness said in a statement.

Vulcan's arm uses force-feedback sensors that allow the robot to detect how much pressure it can apply without damaging an object, and Amazon says the tech enables the robot to pick and stow three quarters of the kinds of products that are kept at a typical fulfillment center.

The tech is currently in use at centers in Spokane, Washington, and Hamburg, Germany. Amazon plans to deploy more units across the US and Europe aver the next few years.

Apart from its ability to work 20-hour shifts, Amazon also says the Vulcan robot complements human workers by helping reach items from high bins without a step-ladder, and low bins that would require crouching.

That frees up workers to focus their efforts on objects stored in mid-height bins, which the company calls their "power zone."

"Vulcan works alongside our employees, and the combination is better than either on their own," Parness said.

Parness also told CNBC that Amazon fulfillment centers will still need human workers, especially for higher-tech roles that involve installing and maintaining the expanding robot fleet.

"I don't believe in 100% automation," he told the outlet. "If we had to get Vulcan to do 100% of the stows and picks, it would never happen. You would wait your entire life. Amazon understands this."

• The popularity of a special type of duty-deferred warehousing skyrocketed in April.
• Inquiries and prices for bonded storage facilities are up sharply, Flexe told Business Insider.
• While the option has cash-flow benefits, it's not likely to solve importers' tariff challenges.

Think of it as hitting "snooze" on a shipment.

With the onset of President Donald Trump's trade war last month, many US importers are exploring all sorts of ways to delay the arrival of their goods while hoping that a more favorable deal is reached.

One suddenly popular option is the century-old concept of bonded warehousing, which has seen prices and inquiries skyrocket in recent weeks, according to Flexe, a network for storage facilities.

With bonded warehouses, arriving cargo is placed in a secure space where it is exempt from tariffs for up to five years — as though it hasn't yet officially entered the country.

"Bonded facilities within the US warehousing ecosystem exist as a duty-deferral option for businesses that are bringing goods stateside but don't necessarily need to consume them within a short period of time," Flexe's head of network, Ben Dean, told Business Insider.

In calmer periods of global trade, this looks like delaying the official arrival of inventory so the import costs are more closely timed to sales — and helps keep accountants happy.

"In a high-tariff environment, the value of deferral goes up, so immediately this increased demand," Dean added.

Dean said Flexe had received 19 requests for bonded warehouse space in the first four months of this year (largely in April), compared with two for the same period in each of the prior two years. Another four requests have already been made in May so far.

One partner Flexe works with in the Los Angeles area reported 60 proposals for its bonded space as of April 29, he added.

"There are shippers who are in a position that they don't believe the 145% tariff will hold maybe 30, 60, 90 days later, so by holding the goods under bond, there's the possibility that they might pay at a lower rate," Dean said, but he cautioned against that strategy.

"Making bets about where tariffs will be any point beyond today is a risky business to be in," he said.

In addition, bonded warehouses ordinarily charge more than conventional facilities anyway, and now prices are going up sharply.

Flexe manages pricing by the pallet, which earlier this year cost $17.50 a month to store in a normal warehouse.

"In the last week, I have seen bonded warehouses charging $5 per day," Dean said. That works out to about $150 per month, though some monthly contracts are priced closer to $52, he said.

Either way, Flexe's data shows that bonded storage is now three to nine times as expensive as what might be considered "normal."

"We're seeing a premium that's beyond anything I've seen in this space in my career," Dean said.

With rising costs and limited availability for bonded warehousing, Dean said importers were likely to turn to other solutions, such as ports in Mexico and Canada.

For retailers, storing inventory near the border could help them avoid duties until the uncertainty around consumer prices and demand is more settled.

Companies are more likely to pay the 145% tariff on an air fryer from China if they're confident that shoppers will actually buy it at a higher price, and it's beneficial to have products ready within a few hours or days via truck or train, rather than weeks on a ship.

Regardless of which option importers choose, the ongoing trade war means there are likely to be new costs that they didn't have to manage before.

"A lot of folks are looking at this as a panacea for tariffs," Dean said, "but there is none."

• Rite Aid is in bankruptcy for the second time in less than a year.
• The pharmacy cited "rapidly evolving retail and healthcare landscapes" as challenges to its survival.
• Experts told BI the chain's financial problems were worsened by larger industry shifts.

It's not an easy time to be in the drugstore business.

On Monday, Rite Aid found itself in bankruptcy for the second time in less than a year, having only exited protection back in September.

In a note to business partners, the pharmacy chain cited "rapidly evolving retail and healthcare landscapes" as challenges to its survival.

Indeed, the industry has changed a lot in the last few years, and experts tell BI the chain's financial problems were worsened by the larger industry shifts.

"What's happened to Rite Aid is quite an extreme, but it's not like CVS and Walgreens are without similar problems," GlobalData retail analyst Neil Saunders told Business Insider.

While the first foray through bankruptcy was largely due to an unsustainable debt load, Saunders said the company wasn't able to find enough cash to survive in what has become a cutthroat industry.

In filings Tuesday, Rite Aid said that although it had reached agreements for some $166 million in credit, several lenders "delayed and in some cases walked away from earlier assurances," leaving the company without funds to restock its shelves.

"Given the nature of products offered, including many products that consumers purchase on impulse, it is critical for the front end to be stocked with readily available inventory for customers to purchase when visiting the store," the company said.

Sarah Foss, bankruptcy attorney and head of legal at Debtwire, told BI she was surprised that post-bankruptcy lenders wouldn't do more to keep stores running.

"If you don't have liquidity to operate, and your vendors aren't going to give you any more stuff, then that's what happens," she said.

Years ago, one of Rite Aid's larger rivals might have jumped at the chance to add the chance to add a competitor's stores to its fleet, but those days are long gone.

"Both CVS and Walgreens are now in consolidation mode themselves," Saunders said.

Powered by the unique combination of back-of-store prescription business and a front-of-store retail operation, the drugstore business made its mark by being both convenient and ubiquitous.

Unfortunately for the major brands, that approach led the industry to become "overbuilt," in the words of Walgreens CEO Tim Wentworth, with too many locations to effectively support.

Meanwhile more patients turned to competitors like Walmart, Amazon, and other online providers to fill prescriptions, while understaffing and retail theft contributed to declining performance at the front.

Grappling with all of that is hard enough with a tidy balance sheet.

"It's not a viable business model like it once was," Foss said. "If your lenders don't think it's a viable business, then you really have problems."

• US retailers have long prided themselves on the ability to offer a large array of consumer products.
• Trump's trade war is set to reverse the trend of ever-expanding choices.
• In the best-case scenario, the remaining choices would be higher quality, but that's not guaranteed.

If the past half century of American consumer life has had one defining feature, it's that the average shopper has a vast number of different product choices available.

Donald Trump's trade war could upend that.

Nearly 36 years ago, when Russian politician Boris Yeltsin toured a Texas grocery store, he famously thought the display was some sort of setup.

"When I saw those shelves crammed with hundreds, thousands of cans, cartons and goods of every possible sort, for the first time I felt quite frankly sick with despair for the Soviet people," he later wrote.

Since then, American retail stores have only gotten larger and more varied, and major retailers often tout the breadth of their assortment — measured in stock-keeping units, or SKUs — as a key measure of ability to give US shoppers new and exciting reasons to buy.

The typical Walmart Supercenter has some 120,000 SKUs, while Amazon boasts of its ability to deliver tens of millions of unique items in two days or less. The two giants represent only a fraction of US retail.

Many of these products are already sourced domestically, but the variety consumers have come to expect relies on an extensive global supply chain that delivers food and merchandise around the globe at astonishingly low prices.

Now, Trump's tariffs on goods from other countries are starting to squeeze America's once-endless supplies of stuff.

"There's definitely a trend towards limiting the inventory, the SKUs, cutting things by half," said Ben Dean, head of network for Flexe, a flexible warehousing service that works with several top retailers.

"At the client conference we were at last week, we've had multiple say that they had just canceled purchase orders," he added. "So that has a direct impact on the assortment, as well as the depth of what's available to the American consumer."

As cargo volumes plummet, execs from major retailers have warned Trump that US shoppers could start to see empty shelves in the coming weeks if his policies continue. Trump acknowledged in a cabinet meeting Wednesday that his policies could lead to fewer choices for holiday shoppers.

"Maybe the children will have two dolls instead of 30" he said. "Maybe the two dolls will cost a couple of bucks more than they would normally."

Michigan State University professor and supply chain researcher Jason Miller explained the conundrum that toy wholesalers and retailers are grappling with due to Trump's 145% tariffs on imports from China, a major supplier to the US.

"I'm going to be very, very, very cautious. I'm only going to import my best-sellers. I'm only going to import the stuff where I feel comfortable I can charge that higher price," he told Business Insider. "You're going to get a lot less product variety, and you're going to get a lot lower imports as a result of this. And we're starting to see those effects."

Like toys, the apparel industry has seen a shift in production from the US to overseas, driven by the pursuit of both price and variety.

Bayard Winthrop, founder and CEO of California-based apparel maker American Giant, told BI that US households spend roughly the same annual clothing budget now as they did in the 1980's, but with one important change.

"In 1980 it represented about 60 items total for that family. Today, it's about 160," he said. "So there has been a structural shift away from lower volume, higher quality, towards higher volume, cheaper."

Low prices and expansive choices were key selling points of increased globalization back in the 1990s, but Winthrop says those benefits have come at the cost of US jobs.

"My hope is that there is this shift towards better quality stuff, made closer to home, that provides good, viable work to people that need it," he said. "If the effect of that is that average Americans need to begin to be a bit more conscious of how they're consuming, I'll take that trade."

It's not clear that all American-made products are necessarily higher quality than imported ones, and shoppers may continue to buy goods at tariff-inflated prices.

Still, one strong likelihood is emerging: American shoppers will soon have noticeably fewer choices about what they can buy.

• A lag in ocean shipping means consumers will soon see the effects of Trump's trade war.
• Canceled orders and a slowing economy are sending ominous signs for US shoppers.
• "We're expecting this to continually get worse," one supply chain expert told BI.

Nearly a month has passed since President Donald Trump announced sweeping tariffs on, well, basically everything the US imports from everywhere.

Apart from financial market gyrations, most of the real-world effects have remained comparatively muted thus far.

That delay is all thanks to the nature of ocean freight shipping times, which can take 20 to 45 days to cross the Pacific.

In particular, orders from Chinese suppliers that were canceled on or after Trump announced the new trade policy are just now starting to be felt in the US.

"We're starting to see this on the West Coast, and we're expecting this to continually get worse," Michigan State University professor and supply chain researcher Jason Miller told Business Insider.

In recent weeks, executives from major retailers, including Walmart, Target, and Home Depot, reportedly warned Trump that US shoppers could start to see empty shelves across the country in the coming weeks if his policies continue.

In a cabinet meeting Wednesday, Trump acknowledged that his policies could reduce shoppers' choices later this year.

"Maybe the children will have two dolls instead of 30 dolls," he said. "And maybe the two dolls will cost a couple of bucks more than they would normally."

Whether faced with sharp price increases or outright product shortages, trade experts say US shoppers are likely to face some difficult realities starting this summer.

Here are seven charts that might be noteworthy on their own, but together, they raise alarms about the consumer economy.

GDP shrank for the first time in three years

Data released Wednesday from the Bureau of Economic Analysis showed a critical dip in US GDP, ending 11 straight quarters of growth and sparking renewed concerns of a recession. It's worth noting that the first quarter ended before the trade war was officially announced on April 2, still, the number was shaped by business expectations, specifically anticipation of new import costs.

That decline came from companies pulling import orders forward

The biggest factor that weighed on GDP last quarter was a ballooning trade deficit from rushed imports. Companies largely knew that some form of tariffs were coming with the election of Trump, and many ordered inventories ahead of time.

Still, ordering a bunch of stuff ahead of schedule comes with its own set of expenses and logistical challenges, and it could leave retailers and suppliers on the hook if consumer spending falters.

Cargo volumes are down significantly — especially from China to the US

Containerized cargo is generally measured in twenty-foot equivalent units, or TEUs, and the numbers have dropped precipitously this week. Some carriers have reported transpacific bookings falling by 30% or more, largely out of China.

A Port of Los Angeles spokesperson told BI that arrivals will slightly increase after next week as more imports come in from countries other than China. Many of these countries are looking to beat the deadline of Trump's pause on so-called "reciprocal" tariffs.

But MSU's Miller said the lift will most likely be temporary.

"Any type of rushing stuff to the US from everywhere else cannot fully counterbalance the loss of Chinese volume," he said.

Instead, the US is receiving more empty containers

Blank sailings are ships that carry empty containers to ports where they will be filled with exports. Normally, the Port of LA sees about a half dozen blank sailings a month, except once a year following the Lunar New Year holiday in China.

The port says it expects to receive 17 and 12 blank sailings in May and June, respectively, and estimates the combined capacity loss to be 350,000 TEUs.

Policy uncertainty is at its highest since early in the COVID-19 pandemic

Hardly anyone — from the White House to Wall Street to Main Street — seems to have a coherent picture of what Trump's goals are with his trade policy.

One result of this lack of clarity is elevated levels of policy uncertainty that last peaked in the early months of the COVID-19 pandemic. Americans are historically pretty capable of managing both good news and bad news, but uncertainty tends to lead households and businesses to lock down spending, cut investments, and take a defensive stance.

Small business optimism is in the pits …

Large firms aren't exactly excited about the trade situation, but many have repeatedly said over the past six months that they are well-equipped to deal with whatever is thrown their way.

Smaller companies, meanwhile, are often more dependent on China and don't have the physical or capital capacity to avoid incurring tariff charges. Nor do smaller companies typically have the purchasing power to ask overseas suppliers for discounts to offset import costs.

"Oftentimes, when businesses and consumers are concerned about the future because of uncertainty, they will stop their activity," Dana Peterson, chief economist at The Conference Board, previously told Business Insider. "Businesses won't invest or they won't hire, consumers won't spend, they'll just kind of sit there and wait and see what happens."

… as is consumer sentiment

Like small businesses, US consumers are not feeling great about the economy.

University of Michigan's consumer sentiment index took another nosedive in April to 52.2, down nearly 20 points from the start of the year. The last time the number was this low was the summer of 2022, when inflation was at its peak of more than 9%.

Of course, low sentiment and high prices didn't appear to slow consumer spending all that much back then, but it's not clear that shoppers will show such resilience this time around.

Even if the White House changes course, Miller said the price impacts and product shortages will start rippling across the US as tariffed inventory works its way through the supply chain.

"A lot of the pricing impacts from this are not going to be felt until the summer," he said. "You're going to start seeing the toasters with the 145% tariff probably hitting the shelves in late May, early June."

• President Donald Trump's trade war is having an effect on small businesses outside the US too.
• Paul Long, founder of Canadian apparel brand Anian, says the uncertainty is steering him closer to the EU.
• The US is massive, Long told BI, but there are other countries willing to work with each other.

Imports to the US may be plummeting, but other countries aren't sitting still while they look to see what President Donald Trump will do next in his trade war.

In Canada, one apparel manufacturer tells Business Insider that the dispute is leading his company toward stronger ties with Europe and the UK, where no new trade barriers have been introduced.

"The United States is very self-focused," said Paul Long, founder of Vancouver-based Anian.

"A lot of the American public can forget that there are also other massive countries and massive economies out there that are just as happy to work with each other," he added.

Long said Anian has always sourced most of its raw materials from Europe to make its clothing in Canadian workshops. While most sales are within Canada, the company also ships to US customers, mostly in the Pacific Northwest.

With the ever-changing guidance from Washington, DC, Long said many of his US-bound shipments which were originally allowed under the de minimis exemption are now being frozen at the border for days without explanation.

The continuing uncertainty now has him shifting his expansion plans from the US to Europe.

"What this has done is it has made us take the gas pedal off our US expansion and start looking at our UK and EU expansion," he said.

Geographically, Long said Anian has already had to figure out the challenges of getting its products to customers across sprawling provinces, and that the US made the most sense as a nearby neighbor for trade.

But he said the tariffs spurred him to rethink the approach across the Atlantic: "If we can do this in Canada, Europe's a lot easier."

Still, Long says some loyal US customers have shown their support of his business through high-dollar orders and personalized notes.

"I think at the end of the day, Canada and the States have so much in common, culturally and economically," he said.

• More than one in five US grocery dollars is being spent at Walmart, for the third year in a row.
• At the same time, Costco is snapping up a growing share of grocery spending.
• The increases come as US shoppers look for more ways to get the most out of their household budgets.

Walmart's reign as America's grocery king is showing no sign of slowing down.

For the third year running, more than one in five US grocery dollars is being spent at Walmart, according to consumer analytics firm Numerator.

And that share (21.2% to be exact) represents spending only at the Walmart US banner. When taking the additional 4% from company's warehouse chain Sam's Club into account, a Walmart overall rakes in a whopping one in four dollars spent on groceries in the US.

That makes Walmart US more than twice as large as nearest rival Kroger. In fact, it would take the four largest pure-play grocery chains combined — Kroger, Albertsons, Publix, and Ahold Delhaize — to finally outgun the behemoth of Bentonville.

Big as Walmart is, it doesn't appear to be the brand that grocery chains appear to be losing sales to. It's Costco.

The Issaquah, Washington-based wholesale club has been snapping up more grocery spending since at least 2019, and has managed to improve its market share by nearly a percentage point in the past two years, from 7.6% in 2023 to 8.5% now. That's no small feat in the extremely competitive and famously low-margin grocery industry.

Costco's focus on a limited selection of bulk products means it probably won't ever take up all of a household's grocery spending, but it is positioned to take more of it.

The share gains for Walmart and Costco alike in recent years come as US shoppers look for more ways to get the most out of their household budgets.

Both companies have seen transactions and sales tick up in the face of economic uncertainty, while competitors are having a harder time hitting their numbers.

Each retailer also does robust business selling a lot more than just food, and those general merchandise sales often bring higher profits than groceries do. That mix can help offset lower markups on the everyday essential foods and sundries that keep shoppers coming in each week.

At any rate, the numbers from Numerator show consistent consumer shift toward these banners, which have an established reputation for value. Walmart, Sam's Club, and Costco now collectively account for more than a third, or 33.7%, of US grocery spending, compared with 30.1% five years ago, per Numerator.