• President Donald Trump's latest round of tariffs is a hot topic for corporate executives this week.
• Leaders at companies like Target, Best Buy, Chipotle, and more have shared their thoughts.
• We rounded up their most interesting quotes from earnings calls, investor conferences, and media appearances.

You know something is a hot topic of discussion when a CEO thanks a Wall Street analyst for not asking about it.

"Thank you for the question that wasn't tariff-related, Anthony," Best Buy CEO Corie Barry said during an earnings call Tuesday, during which she fielded multiple queries on the topic.

Indeed, President Donald Trump's trade war is the new elephant in the room this week as executives field questions on earnings calls, investor conferences, and media appearances.

C-suite execs at companies like Target, Chipotle, and more have shared their thoughts on how the new policies will impact their businesses, their customers, and the US economy.

While their approach and strategies vary, a common theme emerged among some of the business leaders: This is uncharted territory.

"We've not seen this level of tariff before," RBC CEO David McKay said Tuesday at a conference hosted by the bank in New York. "And it's a real departure from what's built, I think, some of the great pillars of success in this country."

Still, he added, "Even with all the tariffs, we're going to have a lot of trade."

And don't be surprised if companies hike prices — fast.

Here's what business leaders are saying.

AutoZone

CFO Jamere Jackson said during an earnings call Tuesday that AutoZone intends to raise prices in order to offset any tariff impacts.

"To be clear, we intend to maintain our margin profile post tariffs, and we expect the entire industry will behave in a rational way as our historical experience has shown," he said.

CEO Phil Daniele said on the call that new autos are more expensive than ever, giving US consumers less of an option about whether to repair or replace their aging vehicles.

Best Buy

Best Buy's Corie Barry told investors on an earnings call Tuesday that price increases on imported products are now "highly likely."

"Tariffs at this level will result in price increases," she said.

Barry said Best Buy directly imports about 2% to 3% of its products, primarily from China and Mexico, but its vendors will likely experience new costs and pass those along.

"We've never seen this kind of breadth of tariffs — and this, of course, impacts the whole industry, so it's not just a Best Buy question," she said.

Target

Target's Brian Cornell said in an interview with CNBC Tuesday that some grocery costs could go up as early as this week, especially in fresh categories that are typically imported from Mexico.

"Those are categories where we'll try to protect pricing, but the consumer will likely see price increases over the next couple of days," he said.

"If there's a 25% tariff, those prices will go up," he said.

Stanley Black & Decker

Speaking at the Raymond James Institutional Investors Conference on Tuesday, CEO Don Allan said Stanley Black & Decker was in a "little bit of a wait and see" situation, especially regarding tariffs on Mexico.

"We do have a fairly substantial Mexican footprint, primarily for our DeWalt power tool business that serves the US market, and so we'll see how the negotiations happen between the two countries and where this lands," he said.

Chipotle

CEO Scott Boatwright told NBC Sunday that Chipotle would absorb costs from tariffs unless they become a "significant headwind" for the burrito chain.

He previously said that the company had reduced its sourcing of avocados from Mexico to 50% while increasing its supply from Colombia, Peru, and the Dominican Republic.

"We don't think it's fair to the consumer to pass those costs off to the consumer, because pricing becomes permanent," he said. "And so again, back to the idea of delivering extraordinary value to the consumer. We're going to stay the course."

Campbell's

CEO Mick Beekhuizen said in an earnings call Wednesday that Campbell's imports two key supplies from Canada: tinplate steel for its cans and canola oil for its chips.

"On the flip side, with some of the reference to the retaliatory tariffs, those mainly relate to Canadian exports," he added. "So we are producing our soup in the United States and we're importing it into Canada, and that would obviously have an impact on that business."

Beekhuizen said the company is working with suppliers to soften the impact of new tariffs, but didn't rule out price hikes.

"Now that being said, I'm obviously going to be very focused to make sure that we provide a good value to our consumers," he said.

• The CEOs of Target and Best Buy each addressed Trump's new tariffs on Canada, Mexico, and China.
• Target's chief executive, Brian Cornell, said some grocery costs could go up as early as this week.
• Best Buy CEO Corie Barry said price increases on imported products are now "highly likely."

Don't be surprised if your Target or Best Buy cart costs more than usual this month.

President Donald Trump's trade war has arrived, and retail CEOs say higher costs are soon to follow.

The chief executives of Target and Best Buy each addressed Trump's new tariffs on Canada, Mexico, and China, which went into effect early Tuesday ahead of both companies reporting their fourth-quarter earnings.

Best Buy's Corie Barry told investors on an earnings call that price increases on imported products are now "highly likely."

"Tariffs at this level will result in price increases," she said. "I think it is very difficult to say — given the backdrop that we're in — exactly, precisely how big that is."

Barry said Best Buy directly imports only about 2% to 3% of its products, primarily from China and Mexico, but that its vendors would likely be experiencing new costs and passing those along.

"We've never seen this kind of breadth of tariffs — and this of course, impacts the whole industry, so it's not just a Best Buy question," she said.

Target's Brian Cornell said in an interview with CNBC that some grocery costs could go up as early as this week, especially in fresh categories that are typically imported from Mexico.

"Those are categories where we'll try to protect pricing, but the consumer will likely see price increases over the next couple of days," he said.

"If there's a 25% tariff, those prices will go up," he said.

Imports from Canada and Mexico are now subject to a 25% charge, while new duties on imports from China bring the total to 20%. Both Canada and China have since responded with retaliatory tariffs of their own, and Mexico said similar measures would be announced soon.

Target's chief commercial officer, Rick Gomez, said on the earnings call that the company now sources about 30% of its store brand products from China, down from 60% in 2017.

Gomez also explained that Target has stepped up its sourcing from countries like Guatemala and Honduras, among others, which are not currently affected by Trump's tariffs.

Shares of Target stock opened the day down roughly 5%, while Best Buy fell by nearly 14%.

Two-thirds of US shoppers surveyed by consumer analytics firm Numerator said they were concerned that tariffs would lead to higher prices on everyday goods, with more than half saying they're worried most about their grocery bills going up.

• Canadians are angry over Trump's tariff threats and 51st-state comments.
• In response, they're abandoning US consumer brands in favor of locally-made alternatives.
• The country's largest retailer said sales of Canadian goods are up by double digits.

In response to President Donald Trump's tariff threats and comments about adopting the 158-year-old nation as the 51st US state, Canadians are hitting back with a bit of economic populism of their own.

"Every single person I meet, they want help and guidance how they can buy more Canadian products, and we're really trying to do everything we can to help them," Loblaw Companies CEO Per Bank said on the company's fourth quarter earnings call last month. Loblaw, which owns several grocery and pharmacy brands, is the largest retailer in Canada.

In a LinkedIn comment a week before the call, Bank said sales of products prepared in Canada were up double digits in the second week of February, especially in grocery, dairy, and frozen sections as shoppers were "already in a patriotic state of mind."

The sentiment goes well beyond the grocery aisles.

"It's a combination of we're hurt and angry," said Mike Moffatt, a former economic adviser to Justin Trudeau, in an interview with Scott Galloway published last week. "Weirdly, we're actually more we've come together more as a country. I think we are less divided than we have been in probably a decade here."

Moffatt noted that Canada is significantly more dependent on foreign trade than the US is, and that new tariffs — as well as any retaliatory tariffs — would create a host of supply chain challenges and new price increases.

Trump said Monday that Canada had "no room left" to avoid the tariffs.

Canadians aren't mincing words about how they're feeling and what they hope to accomplish with their next grocery run.

"I'm a little bit horrified. I'm very scared," Pearl Whamond, a nurse who has lived in Montreal all her life, told Business Insider. She said she's personally witnessed an outpouring of Canadian patriotism even in Quebec, a primarily French-speaking province that is not typically considered very patriotic.

"If Quebec is pissed off enough to become nationalistic and fly the Canadian flag, something's really wrong," she said.

Whamond is among the many Canadians who are trying to boycott American companies in favor of Canadian ones. She said her local Facebook groups are full of people asking for Canadian alternatives to specific products and brands.

She personally hasn't shopped at Amazon in nearly a month — despite her husband previously referring to her as the "Amazon queen" — and is also avoiding brands like McDonald's and Walmart.

Another Canadian based in Alberta who asked to remain anonymous for fear of political backlash, told BI he also has been trying to avoid buying American products, opting for goods made in any other country but especially Canada when it's feasible.

"Patriotism is definitely way up," he said. "I feel like we're actually a united front as Canadians. We're collectively rejecting the divisive rhetoric that has led to all this."

The renewed patriotism even spilled out onto the ice during the final game of the Four Nations Face Off hockey tournament, which replaced the otherwise sleepy NHL All Star Game.

After the US handed Canada a decisive defeat in their round-robin match-up, Canada returned with a vengeance in the final to win a sudden-death overtime victory on par with the Olympics or the Stanley Cup.

"You can't take our country — and you can't take our game," Trudeau posted on X.

It's a mood that has more Canadians reaching for Crown Royal over Maker's Mark.

• When it comes to home prices, two factors make a major difference: size and location.
• GOBankingRates analyzed how much could be bought for $300,000 in different US states.
• Here are the top 11 states they found, led by West Virginia with 2,185 square feet.

US housing prices continue to be high, but two factors make more of a difference than most: a home's size and location.

Where overall costs are higher, home prices are higher, too. And where home prices are lower, buyers can stretch their dollars farther on a larger house.

To get a picture of how this plays out across the US, GOBankingRates analyzed how much home could be had for the same price in different states.

The personal finance website sourced each state's median listing price per square foot from the Federal Reserve and used that figure to calculate the size of a home that could be bought for $300,000.

Here are the top 11 states they found where that budget can get more than 1,700 square feet.

1. West Virginia — 2,185 square feet

West Virginia has the lowest cost of living in the US and was the only state in the GOBankingRate analysis to have a home larger than 2,000 square feet.

While that is a good deal smaller than the modern average newly built home size of 2,500 square feet, it's about as large as homes were back in the 1990s, according to Huts.com.

2. Kansas — 1,894 square feet

Kansas placed second in the rankings, with a low price per square foot of $158 and a relatively low cost of living.

3. Alabama — 1,876 square feet

Alabama and Mississippi ranked right next to one another in the rankings, thanks in part to similar costs of living.

4. Mississippi — 1,855 square feet

Mississippi has a comparatively low median price per square foot of $162.

5. Oklahoma — 1,793 square feet

Oklahoma and its neighbor Arkansas also share several similarities, which result in their placement next to one another in the ranking.

6. Arkansas — 1,781 square feet

With 1,781 square feet, the $300,000 Arkansas home is just about the size that newly built homes were in the 1980's.

7. Iowa — 1,776 square feet

A $300,000 home in Iowa would start to feel snug for the modern family, but it's still quite a bit larger than typical homes were in the 1970s.

8. Indiana — 1,733 square feet

Another pair of neighbors join the list — Indiana and Kentucky, clocking in with remarkably similar prices and living costs.

9. Kentucky — 1,721 square feet

Kentucky's median price per square foot of $174 still offers a fair amount of living space for $300,000.

10. Michigan — 1,706 square feet

Michigan is the northernmost state to make it into the top ten, with a median price per square foot of $176.

11. Missouri — 1,704 square feet

At 1,704 square feet, a household of four would have 426 square feet per person. That's quite cozy by modern standards, but still more spacious than was the norm in the 1960's.

Beyond these top 11, the other 39 US states come in below 1,700 square feet at $300,000, so buyers would likely need to up their budgets to get the same space.

Read the full list at GOBankingRates.

• US Gen Alpha shoppers represent around $28 billion in spending power, according to shopper analytics firm Numerator.
• The younger consumers often have an average weekly allowance of $22, mostly spent on toys and snacks.
• When it comes to brands, their choices tend to be influenced by social trends and digital marketing.

Kids these days are growing up in a remarkably different consumer landscape than prior generations.

The estimated 46 million Generation Alpha shoppers in the US represent around $28 billion in spending power and their influence is already being felt by brands, according to shopper analytics firm Numerator.

Born in 2010 or after, these under-15-year-olds typically have an average weekly allowance of $22, which they largely spend on toys and snacks, Numerator found.

As the new year gets underway, Gen Alpha's brand preferences tend to be influenced by social trends and digital marketing, leading some products to breakout success.

In particular, Samyang — makers of the Buldak "fire chicken" ramen packs — topped Numerator's chart of brands to watch, followed by Owala — the makers of the multicolored flip-top insulated steel water bottles.

Cirkul's hydration system also placed in the top 10 at number seven.

And as kids grow and change, personal care appears to feature more prominently in their discretionary purchases, with three brands in the top 10: Squatch Soap Co., Kitsch, and Hero Cosmetics.

Among kids 6 and older, the top source of product discovery is from their friends, followed by TV commercials and social media influencers.

That stands in contrast to those 5 and under, who often respond to what they see while walking in the store with their parents as well as what they learn about from family members. Interestingly, Numerator found that more than half of six-year-olds have asked for something they saw in an advertisement.

As for categories (rather than brands), about half of kids 10 and under spend their allowance on toys, though Numerator found that share falls off dramatically after they turn 11. Kids of all ages are still spending their money on snacks, however.

Perhaps the least surprising finding was which retailer stands out most among Gen Alpha shoppers: Five Below.

Numerator found that roughly a third of Gen Alpha households shop at the discount chain — a rate that is twice that of the overall US population.

• TJX CEO Ernie Herrman says he's excited about the opportunity for businesses like his from tariffs.
• "We've been to the movie before," he said of rising costs. "It's a different headline."
• Herrman also pointed to several ways the off-price retailer is able to soften the impact of tariffs.

Tariffs are shaking up retail, but not all companies are looking at the changes in the same way.

For TJX, CEO Ernie Herrman says he's excited about the opportunity the new trade costs present for businesses like his.

"We've been to the movie before," he said of managing rising costs from inflation. "It's a different headline; it's just the same approach."

Speaking on a fourth-quarter earnings call Wednesday, Herrman said TJX — which owns brands like T.J. Maxx, Marshall's, Sierra, and Home Goods — directly imports only an extremely small percentage of its inventory from China.

As an off-price retailer, the company typically stocks up on merchandise that other retailers have already imported (and paid the relevant duties on) and could not sell themselves.

In other words, most new tariffs aren't coming directly from TJX's pockets. Meantime, higher prices could push US consumers to get even more cautions about paying full price for things — and as long as TJX can sell products for less than their traditional retail counterparts do, Hermann says the company will come out ahead.

"I'm excited about the sales and margin opportunity in this environment, because this is pretty much textbook situation coming up," he said.

In addition, Herrman noted that a large chunk of TJX's sales come from housewares and furnishings, which tend to be more exposed to Chinese tariffs.

To soften the impact of those — and to differentiate TJX's assortment from its competitors— Hermann said the company sources more of its home goods from Europe.

"It creates an umbrella of fashion and brand and quality that other home retailers don't do," he said. "Customers love that piece of our mix."

• Verizon is capitalizing on its rival AT&T's full-time RTO mandate.
• In a recruiting email, Verizon mentioned remote and hybrid openings amid "changing RTO policies."
• AT&T told BI that its workers "always have a choice" about the company they work for.

The rivalry between two of telecom's biggest players has taken a decidedly modern twist.

After AT&T's full-time return-to-office mandate began to be implemented in January, Verizon reached out to AT&T employees who may not be keen on working five days a week in the office.

In an email sent to multiple AT&T employees and obtained by Business Insider, Verizon's talent team encouraged recipients to explore the company's hybrid and remote job opportunities.

"Following the news of changing RTO policies across the industry, we're reaching out to share helpful resources and potential hybrid/remote job opportunities across Verizon," the email said.

"If you have been personally affected by organizational policy changes or know anyone who has, we're looking to add top talent to the V Team," the email continued. Verizon declined to comment.

While it's common for companies to recruit from their competitors, Verizon's outreach highlights how five-day office mandates have become a sticking point for some workers in recent months.

AT&T told BI that its workers "always have a choice to pick the type of company and work environment they wish to be part of."

"We desire individuals who wish to work in a dynamic and challenging team environment with strong relationships and collaboration fostered by in-office constructs," AT&T added.

AT&T has had to navigate a rocky return to office this year, with some employees describing to BI a lack of desk space, parking shortages, and shifting guidance about the policy.

On Monday afternoon, Verizon's job-listings website showed openings for more than 1,200 roles across the US, 10 of which were remote. Listings for several full-time positions said they required at least eight days in the office a month, as determined by a manager.

The Verizon email also referred to the company's support of DEI at a time when other large employers are backing away from DEI policies.

"If you're looking for a culture of learning that fosters diversity, equity, and inclusion with room to grow, our V Team may be the place for you," the email said.

The email said Verizon job perks include up to $8,000 of annual tuition assistance, up to five weeks of paid time off, paid parental leave, and medical, dental, and vision coverage.

While AT&T traces its origins to 1885, Verizon was formed in 2000 when one of the so-called Baby Bells — spun off from AT&T in the 1980s — merged with GTE.

More recently, the two have been in a race to build out the nation's fiber optic network and extend 5G and satellite coverage.

Though AT&T is now based in Dallas, its former New Jersey headquarters is a major corporate campus for Verizon — not to be confused with Bell Labs in Holmdel, which features in Apple TV's "Severance."

If you are an AT&T or Verizon worker who wants to share your perspective, please contact Dominick via email or text/call/Signal at 646.768.4750. Responses will be kept confidential, and Business Insider strongly recommends using a personal email and a nonwork device when reaching out.

• Joann said it has reached a deal to sell its assets and wind down operations.
• Earlier this month, the company planned to close around 500 stores.
• The fabric and crafts chain experienced two rounds of Chapter 11 bankruptcy in less than a year.

Joann has reached the end of its thread.

The fabric and crafts chain said Sunday that it has reached a deal to sell its assets and wind down operations, including closing around 300 remaining stores.

"We deeply appreciate our dedicated Team Members, our customers and communities across the nation for their unwavering support for more than 80 years," the company said in a statement.

Earlier this month, the company planned to close around 500 stores as it navigated its second round of Chapter 11 bankruptcy in less than a year.

Eight in 10 Joann shoppers surveyed earlier this month by Numerator said they were upset about the news that some of the chain's stores were closing.

Numerator said that three-quarters of those said they were most likely to shop at Michael's or Hobby Lobby as an alternative, about half said they'd shop online, and nearly 40% said they'd go to large stores like Walmart or Target.

The news follows a rough start to the year for retailers, including Party City and Big Lots, which said they are closing 700 and 480 stores, respectively. A Business Insider tally finds more than 2,500 locations are set to close this year so far.

• Walmart issued a conservative outlook for the year ahead in its latest earnings report.
• However, the company shared three key numbers that highlight how the company is growing.
• The retail giant has transformed itself over the years amid competition from rivals like Amazon and Target.

If you think you know Walmart, think again.

While investors weren't too thrilled when Walmart reported a conservative outlook during its fourth-quarter earnings this week, the company shared three key numbers that underscore just how much the company has grown in recent years.

Here's how the retail giant is transforming itself to take on rivals like Amazon and Target.

$681 billion in annual sales

That's the total sales last year — more than any other company in the world, including Amazon.

Perhaps more interestingly, Walmart's full-year revenue has grown by more than $121 billion over the last four years and is greater than the $107.5 billion Target has made in revenue over the past year.

In other words, Walmart has effectively grown by more than one whole Target since the pandemic, which is no small feat, nor is it sitting still when it comes to finding new sources of revenue.

There are signs, however, that Walmart could lose its crown. Amazon, for the first time, notched a stronger fourth quarter revenue and is projected to take the lead in sales this year as it leans harder into AI and web services, CNBC reported.

30% of Walmart's online shoppers pay to not wait

The company said nearly a third of e-commerce shoppers pay a fee to get delivery within a one- or three-hour window on items like groceries and pharmacy prescriptions.

Last year, that number was zero, since it was only introduced in March.

Walmart's ability to achieve this ultrafast same-day service is driven largely by its fleet of more than 4,600 US stores, which are within a short drive of 93% of US households.

"If I could change anything about how we're perceived today, it would be that more people know about our breadth of assortment online and are increasing delivery speed," CEO Doug McMillon said on the earnings call Thursday.

4 million developer hours

Walmart said its AI-enabled coding assistants and completion tools saved developers approximately 4 million hours last year.

Again, that number was nearly zero a year ago.

It's just one among several ways the 63-year-old retailer is morphing into a formidable 21st-century technology company, with an expanding e-commerce marketplace, growing advertising business, and an increasingly automated supply chain.

"As we become more productive and reduce the amount of time we work on routine tasks that gives us time to develop tools that help us grow the business and move faster," McMillon said.

With Amazon nipping at its heels, the Walmart of 2025 is fast becoming much more than your grandad's Superstore.

• Florida's pension board has sued Target over its DEI practices.
• The complaint argues that Target misled investors about the impact of backlash to its Pride collection.
• The suit blames Target's stock price troubles on DEI, rather than other business challenges.

The state of Florida has joined the growing legal challenges against Target.

The State Board of Administration of Florida, an agency that oversees public pension funds that own Target stock, has sued the retailer, arguing it misled investors about the impact of backlash to its Pride campaign and DEI initiatives.

Florida argues Target's handling of its 2023 LGBTQ Pride collection was uniquely harmful to shareholders.

"The Campaign provoked immense consumer backlash and boycotts that caused Target's sales to fall for the first time in six years and wiped out over $25 billion in Target's market capitalization—leading Target's stock to experience its longest losing streak in 23 years," the complaint says.

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

The proposed class action lawsuit is related to an earlier shareholder lawsuit filed in August 2023 against Target, as well as one filed last month by the City of Riviera Beach police pension fund. All three lawsuits were filed in federal court in Ft. Meyers.

Target executives did say during an August 2023 earnings call that traffic and top-line trends were affected by backlash to its Pride collection, but added that "it's not possible to reliably quantify the separate impact."

The company has also recently struggled to compete for inflation-weary consumers against larger rivals like Walmart and Amazon, among other business challenges.

Target may be facing the reverse backlash as well, as numerous employees and customers have told Business Insider they no longer support Target after they feel it has caved to anti-DEI pressure.

Last month, Target said it was retiring several DEI initiatives to remain "in step with the evolving external landscape."

Many other retailers have similarly been retooling their approach to DEI following President Donald Trump's executive order announcing the termination of these practices in the federal government.

The January 22 order directs all government departments and agencies to "take strong action to end private sector DEI discrimination."

• January visits to club stores are up 7% from last year — double the increases for Walmart and Target.
• The strong start accelerates 2024's trend as buying in bulk gets more popular.
• US shoppers are increasingly looking for the best deals and great experiences at warehouse stores.

The hottest club in town might be your local warehouse store.

January visits to Costco, Sam's Club, and BJ's were up more than 7% from last year, according to foot traffic data from Placer.ai. That's double the increases for Walmart and Target.

"It's a continuation of 2024," Kantar retail analyst Gina Logan told Business Insider.

Club store visits significantly outpaced those of Target and Walmart in each of the prior six months, according to Placer.ai's data, with the warehouse chains seeing big gains for the full year of 2024 compared to 2023.

Logan said that while inflation likely drove a lot of that bulk-buying popularity, several other forces have entered the chat this year, including weather, tariffs, and bird flu.

"The same kind of logic applies to the retailers front-loading, and I think that people are stocking up in advance as well," she said. "Costco and Sam's and BJ's are where you're going to get the lowest price per unit."

Not only are the prices often the best in town, warehouse chains also boast some of the best experiences, according to shoppers — and they're getting better.

Costco has long been the gold standard in terms of customer satisfaction across retail, but this year Sam's Club managed to snatch the top spot in the annual American Consumer Satisfaction Index rankings.

"They're really looking into things that will draw people to come to the club," Logan said, highlighting Costco's treasure hunt and new jumbo cookie, BJ's success in fresh foods and grocery, and Sam's Club's tech-enabled member experience.

At the same time, Logan said shoppers are increasingly looking to make the most of their annual membership fee — which has gotten more expensive — and choosing clubs more frequently than the monthly stock-up.

"They're becoming more of a routine and becoming more ingrained in people's shopping routines than before," she said.

The traffic gains are translating to respectable sales growth as well, according to an analysis from Morgan Stanley's retail team. Club stores saw 6.8% monthly sales growth in January, slightly ahead of off-price retailers and behind the dollar store and athleisure categories.

What makes the estimated top-line gains even more notable is that the club stores have been working to bring prices down, which means they have to sell even more stuff to beat the prior period's inflation-boosted numbers.

Official quarterly and annual results will begin to come in on Thursday when Walmart reports earnings for Sam's Club, while BJ's and Costco report in two weeks.

The numbers suggest that club stores are giving customers a strong bang for their buck, and the foot-traffic data shows customers are coming back more often.

• Vermont's Butterfly Bakery is about as hyperlocal as it gets, with all ingredients from nearby farms.
• Still, CEO Claire Georges tells BI her business is still affected by global trade policy.
• She recently tried to get ahead of tariffs by buying extra glass bottles and found storage was a headache.

This as-told-to essay is based on a conversation with Claire Georges, CEO of Butterfly Bakery, a seed-to-shelf natural foods producer in Vermont. The interview has been edited for length and clarity.

I started Butterfly Bakery in 2003 as a tiny natural foods bakery with just me baking in the middle of the night while I had a full time job.

For the last 10 years, we've been selling hot sauce made with locally sourced ingredients.

We even started developing a really great relationship with Heatonist, who went on to manage "Hot Ones" and their sauces. Then the pandemic happened, and hot sauce just really exploded.

Now hot sauce is the majority of what we do.

80% of our ingredients by weight are sourced directly from small farms. The ingredients that aren't are things like vinegar and salt.

We call it seed to shelf.

We're about as local as a business can get, but we still operate and live in this global society and global marketplace. We get our heating fuel from Canada, and a majority of our glass comes from China.

There are two primary manufacturers of our main five-ounce hot sauce bottle: one in China and one in New Jersey.

When I first heard that there was a New Jersey option, I was like, "Oh, fantastic! That fits in with everything we do in terms of sourcing."

It's more expensive, but so are our chili peppers.

We started buying them, and, unfortunately, the quality was really awful. Part of the issue was that they would explode in my staff's hands. They were not tempered properly, so when we would fill it with something hot, the glass would explode.

It would make a huge mess and the entire production had to stop to make sure there's no glass getting in the product. We'd have to throw out sauce that was nearby and start over again.

Not only was that really frustrating, but these US bottles were about 10 to 20 cents more expensive, which is a lot when you're talking about Chinese ones that cost about 35 cents each.

We now use the bottles from China, and back in November we did a whole truckload so that we could stock up to get ahead of any new tariffs.

Fitting in that truckload was an adventure. We were moving things out of every nook and cranny, and everybody just got really cozy with all the glass bottles for a little while, until we got through most of them.

It quickly became clear that if these tariffs were going to last four years, we definitely can't buy four years' worth of worth of glass because there's nowhere to put it.

We've been in business for 20 years now, and you just kind of take your lumps, keep going, and figure it out.

I'm paying about 35 cents for a bottle, and that's varied widely. A 10% tariff means I pay about three to four cents more.

That doesn't sound like a lot on a $9 bottle of hot sauce, but we're usually buying up to $30,000 worth of glass at a time. Now that $30,000 order becomes a $33,000 order — what else as a business could we do with that $3,000?

More than the tariffs on Chinese goods, I'm most apprehensive about potentially higher costs of fuel from Canada.

We're paying between $4,000 and $6,000 in fuel costs for heating and running our equipment, so that's an extra $400 to $600 every single month that we would need to pay.

During the pandemic, I felt like government leaders were trying to help small businesses out. These tariffs feel like the opposite of that.

I don't think tariffs as a whole are bad. I think they just need to have a reason and a benefit.

I am committed to local for the good that it does, but I'm not an isolationist.

For example, there was a store near here that attempted to survive for a couple of years, and they were hyper-hyperlocal — literally everything had to either be made locally or grown locally, with no exceptions.

What it meant was that their deli sandwiches had no mayonnaise on them, because nobody made mayonnaise locally — mayonnaise has oil in it, and nobody was locally growing oil crops.

As a result, nobody wanted to buy the sandwiches, because people want mayonnaise on their sandwiches.

In other words, even local businesses can still benefit from the global economy.

I don't think closing out other people benefits anybody.

• As America's grocery king, Walmart sources a high share of its products from within the US.
• Target, by contrast, relies more on merchandise that is often imported, such as apparel and housewares.
• The difference puts more of Target's business at risk from Trump's promised tariffs.

For all their similarities, Walmart and Target have key distinctions that could spell big differences in how each could be affected by rising import costs as President Donald Trump introduces new tariffs.

In a recent research note, Truist Securities analyst Scot Ciccarelli said Walmart is better positioned to deal with new tariffs than Target, especially since inflation-weary shoppers are likely to be more sensitive to price hikes.

While some of the new tariff costs could be passed on to customers via higher prices, Ciccarelli said retailers are more likely to put pressure on their vendors to absorb some of the pressure.

As the largest retailer in the world, Walmart has shown itself to be particularly effective at negotiating favorable deals from its suppliers.

And if retailers do wind up raising prices, that could tilt in Walmart's favor.

"Higher costs via tariffs would likely further accelerate the consumer search for 'deep value,' and further increase the wallet share for top value providers, including Walmart," Ciccarelli said.

The differences go beyond the price tags. Where a product comes from is increasingly important in the new trade landscape.

"Target is actually much more exposed than Walmart because Walmart is grocery-heavy and groceries are predominantly domestic," Jason Miller, supply chain professor at Michigan State University, told Business Insider.

As America's grocery king, Walmart US makes nearly 60% of its revenue from the grocery category and only about a quarter of sales from general merchandise.

In addition, grocery as a share of sales has been increasing in recent years as the general merchandise share has declined, according to Walmart's annual report.

Target, by contrast, relies much more heavily on merchandise that is often imported, such as apparel, housewares, and beauty. Food and beverage sales accounted for less than a quarter of Target's sales last year.

TD Cowen retail analyst Oliver Chen told BI that Target's apparel segment presents another potential complication, as fashion is more sensitive to seasonality. That could make it more difficult to reschedule orders or reshuffle suppliers and still be on-time and in-style.

"When you miss apparel timeline, you don't get it back, and Target has more apparel exposure," he said.

Beyond its grocery-to-merchandise ratio, Walmart has another key advantage over Target: scale.

"Walmart is much bigger," Kantar analyst Gina Logan told BI. "And I'm not just talking about sales.

"They have a much more advanced supply chain," she added. "They have a wider range of suppliers, they have more ability to pivot and predict demand, and can use their automation and forecasting in order to react to this in a much faster, more predictive way than Target."

This is not the first time the Spark has found a competitive advantage over the Bullseye in the grocery aisle.

When US shoppers began to cut spending back in 2023, prioritizing essentials like groceries in their weekly budgets, sales at Walmart chugged along while Target struggled.

Target has since found success by taking a much more Walmart-like stance with price cuts and bargain brands, and its share of grocery sales has increased by 1-2 percentage points per year over the last three years.

Logan says tariffs could push Target harder into the grocery game, especially with its portfolio of private-label food brands.

Walmart reports its earnings next week and declined to comment. Target, which reports on March 4, did not immediately respond to a request for comment.

Neither company mentioned tariffs during their respective third-quarter earnings calls, both of which took place after the US presidential election.

However, Walmart CFO John David Rainey told CNBC later in November that Trump's sweeping tariff plan could lead the retailer to raise prices on a portion of its products.

"We never want to raise prices," he told CNBC. "Our model is everyday low prices. But there probably will be cases where prices will go up for consumers."

Before that, the last time the companies' executives discussed tariffs on earnings calls was in 2019, according to data from AlphaSense.

At the time, Walmart said it would not raise prices on food impacted by tariffs and would instead look to offset the cost elsewhere.

"As a guest-focused retailer," Target CEO Brian Cornell said in May 2019, "we're concerned about tariffs because they lead to higher prices on everyday products for American families."

He later said in a November 2019 call that then-President Trump's tariffs were amounting to $50 million to $60 million in added costs per quarter, adding that "obviously we're all facing the same tariff issues together."

But as Target's and Walmart's financials show, not everyone will be impacted by tariffs to the same degree.

• The daughters of one of Target's cofounders say they're "alarmed" at the company's DEI rollback.
• In letters to two newspapers, they said their father believed in clear principles.
• Target is among the companies scaling back diversity efforts amid political pressures against DEI.

The daughters of one of Target's cofounders say they're "shocked and dismayed" at the company's recent DEI rollback.

In letters to the editor published in the Financial Times and the Los Angeles Times, Anne and Lucy Dayton said their father, Bruce Dayton, believed in clear principles of happy customers and strong communities.

"We are alarmed how quickly the business community has given in to the current administration's retaliatory threats," they wrote. "It is not 'illegal' for a company to create a business model based on what it believes to be important ethical and business standards."

Bruce Dayton, who died in 2015 at 97, was one of five brothers who grew their father's Minneapolis department store into a national brand.

Neither the sisters nor Target immediately responded to requests for comment from Business Insider.

Target is one of several companies scaling back diversity efforts amid wider political scrutiny of DEI programs following Donald Trump's reelection.

CEO Brian Cornell said in 2023 that DEI was "the right thing for society, and it's the great thing for our brand."

Days later, the company began pulling LGBTQ+ pride merchandise after conservative activists mounted a campaign against the celebration.

In late January, a police pension fund in Florida filed a proposed class-action shareholder lawsuit against Target, alleging the company made "false and misleading" statements about its DEI strategy's effect on its financial results.

While some companies have announced their moves, others have discreetly removed references to DEI from their communications.

Some companies, including Deloitte and Google, have said that as federal contractors, they're required to follow Trump's recent executive order to end DEI programs at federal agencies.

"By cowering," the Dayton sisters said, "Target and others are undermining the very principles that have made their companies a success."

• A highly visible campaign against DEI is underway against companies like Costco.
• Political pressure is putting execs into a delicate balancing act over how to run their businesses.
• Experts said diversity and inclusion are more baked into corporate culture than ever.

Costco has found itself in the political crosshairs over DEI, and now some corporate leaders are left wondering who could be next.

In the meantime, some are choosing to make tweaks or changes.

On Tuesday, Disney's HR chief told employees the company is rebranding its DEI metrics and programs, as well as changing the language of some content advisories.

And last week, Google linked changes to its DEI initiatives to concerns over compliance with executive orders, as the tech giant is a federal contractor.

Although many lawsuits and shareholder proposals against diversity, equity, and inclusion have failed, experts told Business Insider that the highly publicized challenges, including executive orders from the White House, could still have a chilling effect.

Companies are walking a line. They don't want to get into legal hot water, and yet they likely don't want to be seen as retreating from the values they've espoused for years.

At the same time, the experts — two lawyers and a business researcher — say the growing pressure on CEOs to eliminate their DEI practices might ultimately amount to little practical change in some workplaces.

While some companies, most notably Costco, are digging in their heels in defense of DEI, others, like McDonald's, are taking a more conciliatory approach to the issue.

DEI policies get a facelift

The main changes companies make will likely boil down to how they communicate about their policies, both internally and externally, said Michael Thomas, a California attorney specializing in corporate diversity practices at the law firm Jackson Lewis.

Thomas said his firm has seen an increase in requests from companies to review their DEI initiatives for legal risks from clients who are also concerned about how they are perceived by employees and customers.

A major piece of the firm's legal review is examining how companies communicate about their policies and practices in websites, reports, and other filings, he said.

Indeed, some of the changes at Disney appear to be more about how the company talks about DEI.

"What won't change is our commitment to fostering a company culture where everyone belongs and everyone can excel," Disney's chief human resources officer, Sonia Coleman, said in a memo obtained by BI.

Emphasizing style more than substance could suggest a likely path forward for companies that see diversity and inclusion as beneficial to their business.

"Even Walmart and McDonald's have conceded less than meets the eye," Yale School of Management's Jeffrey Sonnenfeld told BI. "They're keeping the same principles and objectives. It's just a question of nomenclature, metrics, and bureaucracies."

McDonalds, for example, said in its memo to franchisees earlier this month that it was retiring "aspirational representation goals," swapping a broad vendor DEI pledge with direct discussions with suppliers about inclusion, and changing the name of its diversity team to be the Global Inclusion Team.

Sonnenfeld pointed to the way terms like sustainability, climate change, and pollution abatement have cycled through the corporate lingo while generally sharing a common objective of protecting the environment.

Diversity and inclusion, in many cases, have been around long enough at this point that they're often deeply embedded in corporate cultures, making it significantly harder to regulate, he said.

"It's impossible to the point of insanity to try to ferret that out," he added. "So the less modular it is, the less vulnerable they are."

Some companies may pull back

Still, the anti-DEI pressure could have other companies taking a more drastic shift, said Jon Solorzano, a partner at the law firm Vinson & Elkins who advises public and private companies on areas related to ESG and risk management.

Under this new administration, companies that may have been on the fence about DEI may decide to pull back some programs, he said.

"Different companies view this differently," he said. "Those that are probably in the more consumer-facing world are particularly sensitive to the reputational risks on both sides."

Among the major companies that BI has tracked as retreating on DEI over the past year, most follow a similar pattern: ending representation goals that could be construed as quotas for hiring or sourcing, halting participation in rankings and surveys, and reassigning DEI-focused staff and resources.

More recently, BI reported that Amazon has changed the language on its website regarding DEI. A senior AWS executive told employees in her division that there would be "no changes" to key DEI-related benefits, including a transgender benefit offered by the company.

And earlier in December, Amazon's VP of inclusive experiences, Candi Castleberry, said in a memo shared with BI that while the company was ending some "outdated" programs, it was part of an "evolution to 'built in' and 'born inclusive,' instead of 'bolted on.'"

Of course, rebranding alone is not an option at federal agencies under Trump's rules, which require a deeper review of a program's history. Private companies aren't subject to that same level of government scrutiny — for now, at least.

Last Wednesday, newly sworn-in US Attorney General Pam Bondi said the Justice Department intends to "investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector."

"They really need to balance those risks," Solorzano said in reference to companies' decision-making. "What's more risky, the reputational harm of dealing with one of these investigations or having a mutiny of their employees?"

Business leaders make a case for diversity

JPMorgan, like Costco, has also taken a strong stand in defense of diversity, equity, and inclusion and is now the target of political and activist pressure.

At the World Economic Forum in Davos, Jamie Dimon shrugged off an investor group's opposition to JPMorgan's DEI policies. In 2020, the bank started tracking executives' progress toward DEI goals, which affects their compensation, but it doesn't disclose publicly what proportion of executive pay is linked to DEI work.

Solorzano said he believes there will likely be a "bifurcation" of companies over DEI. While many companies in recent years have adopted DEI programs, he said, "I also don't know that for every organization it was really core to their strategy."

"For places like Costco, it actually may be," he added.

In Costco's December statement to shareholders, the board said diversity "helps bring originality and creativity" to its offerings, leading to greater satisfaction for its increasingly diverse customer base.

A group of 19 Republican state attorneys general last month wrote a letter to Costco CEO Ron Vachris expressing "concerns" about the company's compliance with changing state and federal laws. The AGs' letter doesn't identify any specific allegations of illegal practices.

Solozano said the scrutiny Costco is facing — and how Costco responds — is "definitely being watched by all other major consumer branded companies right now."

• Egg prices are at record highs as US supply issues worsen.
• Grocery retailers, including some Costco and Trader Joe's locations, are limiting egg purchases.
• More than half of shoppers in a recent survey said they've seen shortages or out-of-stock notices for eggs.

This might not be the week to try your hand at making a soufflé.

Some grocery retailers are now limiting shoppers' egg purchases as US supply challenges push egg prices to record highs.

Business Insider saw signs at stores including a Costco in New Jersey, a Trader Joe's in New York, a Kroger-owned Metro Market in Wisconsin, and a Whole Foods in Wisconsin informing shoppers of limits on the number of eggs shoppers could buy, with all four citing supply issues.

A Trader Joe's spokesperson told BI the company was limiting customers to one carton per customer per day at all stores nationwide.

"We hope these limits will help to ensure that as many of our customers who need eggs are able to purchase them when they visit Trader Joe's," the spokesperson said.

The Costco location limited shoppers to 3 egg cartons. The Wisconsin store, a Metro Market location run by Kroger, asked customers to limit themselves to two packages each.

A nearby Whole Foods was limiting customers to three packs.

Spokespeople for Costco, Kroger, and Whole Foods did not respond to requests for comment.

Meanwhile, a representative for Texas-based grocer H-E-B said it remains in good supply and is working to manage costs to keep prices affordable.

A Target store in Wisconsin that BI visited wasn't limiting how many eggs patrons could buy, but signs on low-stock shelves informed customers that the chain is "actively seeking additional supply" and apologized for the inconvenience. Target did not respond to a request for comment.

More examples have been posted by US shoppers on social media.

A spokesperson for Walmart told BI that the retail giant hasn't instituted a national limit on eggs, except for the 60-count package, which is now limited to two per transaction. Walmart sells one in five eggs sold in the US, according to market research firm Numerator.

More than half of shoppers surveyed by Numerator said they've seen shortages or out-of-stocks for eggs at stores across the US.

The shortages were most pronounced in cities and in the Western US, with BJ's, Costco, Target, Trader Joe's, and Publix among the most affected brands, according to Numerator.

More than 70% of shoppers told Numerator that egg prices are "somewhat or very expensive" in their area.

The new policies come after numerous instances of shoppers buying up cartloads of eggs, apparently in response to the ongoing bird flu outbreak that has contributed to a lower supply of eggs.

Several videos have gone viral showing Costco shoppers clearing a pallet of eggs within minutes, and BI last week observed one Target shopper purchase a cart full of approximately 30 dozen eggs and nothing else.

If you are an egg shopper who wants to share your perspective, please contact Dominick via email or text/call/Signal at 646.768.4750.

The offers and details on this page may have updated or changed since the time of publication. See our article on Business Insider for current information.

• The secondary watch market has declined over the past years.
• But there are still makes and models that will sell for well above retail value.
• These are the 10 models that are the best investment right now — if you can find them new.

Last year was not kind to the secondary watch market — and things are not looking much better for the first quarter of 2025.

After peaking in May 2022, watch prices on the secondary market have fallen for 11 straight quarters, according to a report from WatchCharts and Morgan Stanley that came out earlier this month,

In the last months of 2024, the resale watch market continued to decline, with prices for the full year down 5.7% compared to 2023.

Over the past couple of years, inventory has flooded the resale market as those who purchased watches as an investment when the market was hot rushed to cash out. At the same time, the luxury market has struggled amid rising interest rates and economic uncertainty.

"Once they see the prices falling and that there's less liquidity in the market, they try to sell," Charles Tian, the founder and CEO of WatchCharts, told Business Insider. "That floods the market with inventory and inevitably drives prices down."

The market may not have reached an inflection point quite yet. The WatchCharts and Morgan Stanley report predicts secondary prices will "continue to fall for the foreseeable future."

"Most brands will need to navigate the widening gap between retail and secondary prices, driving more value-oriented consumers toward the secondary market and challenging brand perception by potentially making retail prices appear overpriced to some customers," the report's authors wrote.

Still, some watches make better investments than others.

The Big Three — Rolex, Patek Philippe, and Audemars Piguet — still make up about 64% of the market. As of January 2025, most Rolex and Audemars Piguet models trade above retail — 56% and 63%, respectively — as do 38% of Patek Philippe models, per the report.

"Luxury brands like Rolex and Audemars Piguet have a strategy of maintaining limited availability at official retailers, which often means that many of their most desirable models are perpetually sold out in stores," Paul Altieri, the founder and CEO of online luxury watch retailer Bob's Watches, said of the Big Three manufacturers, likening them to luxury fashion players like Hermès.

"Anytime you have demand exceeding supply, where the supply is limited, or demand is hyperinflated, you get this big disparity between secondary market value and retail price," he added.

Recognizable models like the Rolex Daytona or GMT-Master II are perpetually in high demand, Tian said, while other styles can rocket into the stratosphere because of social media trends.

Altieri said that classic Rolex styles, like the Daytona and Submariner, tend to be timeless, adding that the brand makes up more than 75% of Bob's Watches sales.

Chrono24, a Germany-based marketplace, pulled the 10 models selling at the highest premiums over the manufacturer's suggested retail price. The marketplace provided the resale prices in euros, which BI converted to US dollars as of February 3rd.

The majority of the watches on the list are Patek Philippe's Aquanaut model, a collection of minimalist and sporty watches that has been around for nearly three decades and comes in various metals and finishes.

While the numbers suggest these models make the smartest purchases, Altieri warns against choosing a watch solely because of its resale value.

"Find something you are going to enjoy, not something that you think will go up in value," he said. "Quality assets always go up in value, whether it's real estate, stocks, arts, or watches, so buy what you like."

Patek Philippe Aquanaut 5267/200A-001: 132% above retail

• Retail Price: $22,270
• Market Price: $51,790

Patek Philippe Aquanaut 5968A-001: 135% above retail

• Retail Price: $55,970
• Market Price: $130,850

Audemars Piguet Royal Oak 15407ST.OO.1220ST.02: 138% above retail

• Retail Price: $76,400
• Market Price: $181,990

Patek Philippe Nautilus 5712/1R-001: 142% over retail

• Retail Price: $85,900
• Market Price: $207,630

Rolex Oyster Perpetual 124300 Turquoise Celebration: 146% above retail

• Retail Price: $6,500
• Market Price: $16,015

Patek Philippe Aquanaut 5167A-001: 154% above retail

• Retail Price: $24,750
• Market Price: $62,960

Patek Philippe Aquanaut 5261R: 155% above retail

• Retail Price: $63,750
• Market Price: $162,680

Patek Philippe Aquanaut 5267/200A-010: 159% above retail

• Retail Price: $22,270
• Market Price: $57,595

Audemars Piguet Royal Oak 15416CE.OO.1225CE.01: 161% above retail

• Retail Price: $101,100
• Market Price: $263,742

Patek Philippe Cubitus 5821/1A-001: 173% above retail

• Retail Price: $41,240
• Market Price: $112,740

• In a matter of hours, the USPS said it had suspended and then resumed accepting parcels from China and Hong Kong.
• The head-spinning move comes as the carrier develops a way to collect tariffs on small packages.
• Parcels worth less than $800 were previously exempt from tariffs, but Trump has ended that policy.

Americans on the East Coast awoke to shipping chaos on Wednesday morning. The United States Postal Service was no longer accepting parcels from China and Hong Kong.

By the time those on the West Coast awoke, USPS said the suspension had been lifted.

The whiplash from the roughly 12-hour pause raised new questions about how exactly the world's sprawling shipping apparatus would navigate two major changes: the implementation of President Donald Trump's new tariffs against China and the end of a policy long used by Shein and Temu to avoid US import fees.

As the market reacted to the suspension in overnight trading, USPS said it was working to "implement an efficient collection mechanism for the new China tariffs to ensure the least disruption to package delivery."

The challenge likely facing USPS and other shipping firms arises from the fact that, ordinarily, companies are the ones to pay any tariffs on the products they bring in from overseas, the cost of which often gets rolled into the final price for end consumers.

Small parcels (worth less than $800) were generally excluded from import fees under a policy known as the de minimis exemption — and that made it convenient for the US Postal Service to accept e-commerce shipments from its Chinese counterpart, the China Post, along with postcards, letters, and other traditional mail for direct delivery to American addresses.

Meanwhile, companies like Shein, Temu, and others quickly figured out they could bypass existing US tariffs by shipping directly from China to US customers, leading the de minimis exemption to be dubbed a loophole.

A congressional report said that over 60% of all de minimis shipments to the US in 2021 came from China and that Temu and Shein were "likely responsible" for roughly a third of these small shipments to the US in 2022.

By contrast, the report estimated that Gap paid some $700 million in import duties in 2022, and H&M paid $205 million, while Temu and Shein each paid $0.

Trump's new tariff policy has largely closed that loophole. The policy now creates fresh uncertainties for businesses and consumers alike in a hyperconnected global marketplace.

For starters, the question of how to collect that fee in a direct-to-consumer transaction is not yet resolved, and it's not yet clear how businesses and their customers will respond to any resulting cost increases.

Plus, if orders are routed through some other channel or carrier, it's unclear how the change in parcel volumes could affect fulfillment prices or shipment times.

One company already adapting is Yun Express, a Chinese cross-border logistics company.

The company posted instructions for customers advising them of the new charges and requiring shippers to provide details about each package, including the item name, value, quantity, destination country code, and weight.

Yun Express also said it will begin charging a 30% prepayment for customs duties on shipments from China to the US, which will be adjusted and refunded based on actual fees imposed at the port of entry.

Global Data retail analyst Neil Saunders said in a note that there will likely continue to be strong demand for Chinese products, in spite of tariffs or other costs.

"While the era of frictionless e-commerce between the US and China is coming to an end, this does not signal the death of marketplaces like Shein and Temu," he said. "Even if prices rise, both will remain comparatively cheap, which taps into the continued consumer desire for low prices."

• Several companies — including Walmart — have recently walked back or softened their DEI policies.
• But Sam's Club CEO Chris Nicholas said "openness" and "connection" remain critically important.
• "We serve all of America," he told BI. "That's the definition of being inclusive."

Corporate DEI may be in retreat, but Sam's Club CEO Chris Nicholas says the principles of diversity and inclusion remain as important as ever.

"If you're willing to come here and work hard on behalf of our members and form relationships that allow you to develop as a human being and as a leader, there's nothing you can't do at Sam's Club," he told Business Insider. "I think that's true also of Walmart."

Walmart, which owns Sam's Club, is one of several companies that have recently walked back or softened their diversity, equity, and inclusion policies following the election of Donald Trump.

The company said in November that it would wind down its Center for Racial Equity, stop providing data to the Human Rights Campaign, and end the use of terms like "DEI" and "Latinx" in official communications.

"We are willing to change alongside our associates and customers who represent all of America," the company said at the time.

One thing that has already changed in recent years is the growth of Walmart's (and Sam's Club's) data on just about every aspect of its business, and Nicholas said that had a tremendous leveling effect.

"The data leads us to the answer," he said, "not historical views or personal proclivities."

The most obvious metric is whether something sells or doesn't. Offering only a few thousand items in a warehouse means that each product must perform well or get cut.

Beyond that, Nicholas pointed to Sam's Club's 50,000-member community of shoppers who share feedback with the company and one another. By providing a sense of welcome and belonging, the company is better able to discover unique "treasure hunt" offerings that excite members, he said.

"We serve all of America," he said. "That's the definition of being inclusive."

Sam's Club's larger rival, Costco, has also found itself in the political crosshairs over its diversity programs, which the company's board forcefully defended against a shareholder challenge.

"As our membership diversifies, we believe that serving it with a diverse group of employees enhances satisfaction," the Costco board wrote in December. "Among other things, a diverse group of employees helps bring originality and creativity to our merchandise offerings."

Nicholas said Sam's Club, too, relies on the diversity of its members and employees to find and deliver the best and most interesting products, which is good for business.

"If you get stale, people will just — you know — they won't engage with you," he said.

DEI, as it has been understood and communicated for the past decade or so, may be on the way out, but Nicholas said deeper changes are here for the long term.

"My job is to create an environment of openness and expansive thought and connection, and I think we do a really good job of that," he said.

• Walmart-owned Sam's Club has a "treasure trove" of purchasing data.
• CEO Chris Nicholas told BI this data is powering the company's big push into experiential retail.
• Nicholas has named Diana Marshall to be his new chief experience officer, or CXO — a relatively rare title in retail.

When Sam's Club CEO Chris Nicholas saw the news that his company had unseated perennial winner Costco as the top-rated retailer for customer satisfaction, he was understandably pleased — but he didn't bask in the feeling for long.

"There's more to do," he told Business Insider in an interview. "Nothing happens by accident."

The jump in Sam's Club's score — leapfrogging Costco's similarly strong rating — follows a busy year in which the Walmart-owned warehouse club rolled out new futuristic tech intended to make shopping easier and more enjoyable.

It was one year ago that the company announced its AI-powered exit gateways that are doing away with one of the biggest frustrations of shopping at a warehouse club: receipt checks at the exit. And in October, Sam's Club opened its first location without traditional checkout lanes.

It's a bold bet as some other retailers, like Amazon, pulled back from using AI-powered "Just Walk Out" cashierless tech at its Fresh stores in favor of smart carts, and others, including Target, have put new limits on self-service options at many locations.

For Sam's Club, it's part of a longer-term strategy to give it a high-tech edge in the historically low-tech warehouse retail segment. The company says more than half of customers at locations with the AI scan-and-go option use the tech, and it's helped the shoppers get out the door 23% faster.

"This is all a result of working really hard at the inputs and then the outputs heal themselves," Nicholas said. "Because we're building digital products for our associates as well as for our members, it means you create connected experiences that allow people to self-solve and work together on having a delightful experience."

One advantage that warehouse clubs, in general, have over their traditional retail counterparts is much more detailed information about shoppers' purchase histories, as a membership is required for every purchase. (General retailers can still piece together a profile using payment or loyalty cards, of course.)

At Sam's Club, however, member profiles are augmented by massive amounts of digital data, plus additional insights from the 50,000-strong Members Mark community of shoppers that share feedback on products and services.

"It's certainly true that we've had this treasure trove of data, and we've been on this journey the last couple of years to really hone it so that we understand and can use this data more specifically," Nicholas said.

Although Sam's Club doesn't publicly report detailed financial results, one consistent bright spot in Walmart's earnings in recent years has been the growth of revenue from memberships and from retail media.

In addition, Nicholas notes that much of the tech investment expenses for Sam's Club are borne by Walmart's deeper pockets, since the club has often served as an innovation lab for the world's largest retailer.

With all of this data, Nicholas says he decided to put one person in charge of turning it into a more effective flywheel for the business.

"The faster the flywheel spins, the more that virtuous circle helps you open up even a deeper gap versus everybody else," he said.

In this spirit, Sam's Club has appointed Diana Marshall, who was previously chief growth officer, as its new chief experience officer. Marshall will report directly to Nicholas.

CXO is a title that Constellation Research founder Ray Wang told BI is more typically found reporting to the CEO at tech, hospitality, travel, or financial services companies than at retailers. Sam's Club said it consulted with Wang on the strategy.

"We see chief experience officers, in general, playing a bigger and bigger role because you're basically differentiating on time and experience," Wang said. "If they are saving time, they'll pay a premium. If they get a better experience, they'll pay a premium."

Nicholas said that Sam's Club is committed to the long-standing warehouse club business model of earning most of its profits from membership income. That means any revenues — say, from the expected $100 billion retail media advertising market — will be reinvested in the business in the form of better technology, higher wages, and lower prices.

"I think we can create these unexpected, unforgettable, connected experiences from members, and I believe genuinely that that's going to redefine what the future of retail looks like," he said.