Study: NAFTA withdrawal would mean fewer retail jobs, higher consumer prices
WASHINGTON — Withdrawing from the North American Free Trade Agreement would cost retailers and consumers up to $16 billion a year and lead to the loss of 128,000 retail-related jobs over the next three years, according a recently released study prepared for the National Retail Federation, the Retail Industry Leaders Association and the Food Marketing Institute.
“There’s a lot at stake for American retailers, workers and consumers as the administration resumes NAFTA negotiations,” said NRF president and CEO Matthew Shay. “It’s clear NAFTA must be modernized, but we can’t lose sight of the fact that this agreement helps ensure that American families have access to products they need at prices they can afford. As this report shows, withdrawing from NAFTA would jeopardize countless U.S. jobs and force consumers to pay more everyday products like groceries and blue jeans.”
In 2017, retailers imported $128 billion worth of merchandise from Mexico and $54 billion from Canada, according to the AT Kearney study. NAFTA has made most of those goods tariff-free since it took effect in 1994.
The study finds that withdrawing from NAFTA would subject retail imports to $5.3 billion in annual tariffs that would that would most likely be passed along to consumers in the form of higher prices. More specifically, food and beverages sold at grocery stores would see the biggest hit at $2.7 billion, followed by apparel and footwear at $501 million, electronics and appliances at $390 million, household goods at $498 million and auto parts at $240 million. The remainder would come from the “flow-through” costs of tariffs imposed on other industries that would drive up retailers’ costs for services such as transportation.
Even with the tariffs passed on, retailers would see a $10.5 billion hit to their bottom lines, the report said. Retailers would likely leave 68,000 jobs unfilled over the next three years, and another 60,000 jobs supported by the retail industry would be lost.
“This report helps illustrate how — thanks in part to our expanded trade with Mexico and Canada — U.S. grocery shoppers can wander the produce section in January and take home groceries to allow them to eat like it’s a June day,” said FMI president and CEO Leslie Sarasin. “Customers are accustomed to this type of access to fresh products and increasingly demand it in their efforts to make healthy choices. The quality, consistency and affordability that stems from the interconnectedness of our three economies helps guarantee that Americans have the most abundant, safest, healthiest and most cost-effective food choices in the world.”
“This report confirms that leaving NAFTA puts American jobs, family budgets and the entire North American economy at risk,” added RILA president Sandra Kennedy. “We encourage the administration to modernize and preserve NAFTA to support the millions of American jobs along the supply chain that rely upon free and fair trade.”
Walmart to discontinue its scan and go checkout app
Walmart customers can no longer use their smartphones to pay for their order and skip the checkout line.
Despite a successful rollout across its Sam’s Club warehouse chain, Walmart is discontinuing is Scan & Go mobile checkout app across its retail stores. The deciding factor was that too many customers found the process too cumbersome, especially when it came to bagging, weighing and then scanning items, including fresh fruit and vegetables, according to Bloomberg.
The technology was initially introduced in a few select markets, including Dallas-Fort Worth, Texas; Orlando, Florida, and Northwest Arkansas. In January, the discount giant announced that the app would be expanded to 100 stores in 33 states across the country. However, Walmart reported that the app was considered “a test,” according to Ragan Dickens, spokesman for Walmart.
“We’ve completed the test, and will use the information we learned from customers and associates as we continue to create a better, easier shopping experience in our stores and online,” he told Chain Store Age.
While the program will be pulled out of approximately 150 Walmart stores, the service will remain at Sam’s Club, where its usage doubled last year, Sam’s CEO John Furner said in the Bloomberg report.
One potential replacement is the company’s “Check Out With Me” service. The program outfits associate with mobile devices and Bluetooth printers that enable them to check out customers and provide them with a receipt on the spot. The discount giant is testing mobile technology in its Lawn & Garden Centers across more than 350 stores.
Former Walmart exec joins Target’s sourcing services
Target named a sourcing veteran to head up its global sourcing organization.
The discounter, which is the second largest U.S. importer, named William J. Foudy, Jr. as president, Target Sourcing Services, effective June 17. The retailer’s Sourcing Services has 14 offices around the world, which facilitate production in 34 countries.
Foudy joins the retailer from Walmart, where he was VP of global sourcing, based in Hong Kong. He has more than 25 years of experience in the sourcing industry and has led international teams for brands such as Adidas and Nike. In his new role, Foudy will oversee the company’s global sourcing organization, including strategy, operations, quality assurance, product safety and responsible sourcing initiatives. He will report to Target’s executive VP and chief merchandising officer, Mark Tritton.
“Target’s global sourcing operations are a key strength of ours and integral to our ability to deliver a differentiated assortment at an unmatched value in the market,” said Tritton. “The broad scope of Bill’s retail experience, including his tenure working with global brands, will accelerate our efforts as we continue to reimagine our owned brand portfolio, offering guests even more unique products for an incredible price that they can find only at Target.”