Latest / Financial Survival Network / Price Wars: How Target's Strategies are Shaping the Industry -- Carl Gould #6077

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Price Wars: How Target's Strategies are Shaping the Industry -- Carl Gould #6077 · Financial Survival Network

• 0:00
  Well, Target's customer clearly does not want to pay the continuously increased prices,
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  and they say, listen, you're going to price us out. And what
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  the clientele is telling Target is we like you for the other items. Oh,
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  we don't need you for groceries. You want us to come in and
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  buy every day, You're going to have to keep your prices lower because you
• 0:19
  know what, in some cases, eggs or eggs and milk is milk.
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  And if you you know, I don't, I'm not going to pay a
• 0:24
  pri of just walk through your door because the milk with the same label on
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  it is a little bit more money. You're listening to Carrie. Let'sa's Financial
• 0:32
  Survival Network where you get valuable information you just can't find anywhere else to thrive
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  in today's trying times. You need the Financial Survival Network now more than ever.
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  Go to Financial Survivalnetwork dot com and get your free newsletter and gift.
• 0:49
  Financial Survival Network now more than ever, And welcome you are listening to and
• 0:59
  watching the Financial Survival Network. I'm your host, Kerrie Lutz, good friend
• 1:03
  of the show. Carl Gould is back and Carl good news for consumers.
• 1:07
  Then Tarjay is cutting prices. How much further behind can Walmart be and the
• 1:14
  rest of them? Right, those with grocery grocery sections of their store,
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  like Target, Walmart Aldi is another one who has done it. Target will
• 1:26
  most notably cut the prices of five thousand items, mostly everyday items. Now,
• 1:30
  if you want to buy ice cream, it's going to be more expensive.
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  But if you're buying two other paper and twitt paste and shampoo and other
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  consumables, yeah, those prices are going to be lowered, at least for
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  the time b All right, So we should be grateful then, But what
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  does that say about the economy and their business targets business. Well, Target's
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  customer clearly does not want to pay the continuously increased prices, and they say,
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  listen, you're going to price us out. And what the clientele is
• 1:59
  telling Target is we like you for the other items, or we don't need
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  you for groceries. You want us to come in and buy every day,
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  You're going to have to keep your prices lower because you know what in some
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  cases eggs or eggs and milk is milk. And if you you know,
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  I don't I'm not going to pay a prior and just to walk through your
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  door. Because the milk with the same label on it is a little bit
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  more money. I'm not gonna do it. Yeah. And then Target was
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  always a little upmarket from Walmart, right correct, correct, And and and
• 2:28
  they cater to a slightly different clientele which has always appreciated the difference, and
• 2:34
  from a discretionary standpoint, would spend the ex trip. But right now,
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  you know, customers vote with their dollars, and if they're saying, listen,
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  I'm we're simply not willing to spend the money on a commodity item,
• 2:46
  everyday item, just for the convenience. So you're gonna you're gonna have to
• 2:52
  come back to us. We are going to stop chasing your higher prices,
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  right yeah. Which, hey, it's kind of what the people are talking
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  to the pollsters, you know, for the election. Right It's the kind
• 3:06
  of the same thing, isn't it. And no question about it. These
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  are concerns. You know, for a period of time, the economy was
• 3:13
  much stronger, the inflation was low, it costs the cost of everyday items,
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  the cost of borrow money was all cheaper. Now it's it's we've gone
• 3:22
  through some record highs. It's pulled back from there, of course, but
• 3:25
  it's still a lot more expensive to live your life. You know, most
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  Americans lost at least seven to ten percent of their of their usable income to
• 3:37
  inflation. Yeah, so true. Hey, maybe more than that, maybe
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  twenty percent in the last few years. Hey, if you live on fast
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  food or you're a fast food sectionata, that's the right term, or maybe
• 3:51
  consumers probably it. The fast food prices got up seventy two percent. The
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  value meal for McDonald's is now bucks right, yeah, exactly, And so
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  yeah, the happy meal is not quite as happy right now. And we
• 4:10
  understand that. We understand that prices will go up. I don't no one
• 4:14
  likes it, but they understand it. But the rate at which it's gone
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  up is alarming, and it starts to point towards lack of leadership. And
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  that's what people are looking at. Leadership of the country, leadership of the
• 4:26
  leadership of these particular stores. You know. And if you've got target,
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  it's it's very easy, you know, if you're winning or not, because
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  people are either coming to the door or they are not, and people are
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  doing the repeat purchases or not. You know, you can tell right away
• 4:41
  that's The nice thing about retail is your consumers tell you exactly who you are
• 4:45
  on a day in, day out basis. Now, if this continues,
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  we are in an election cycle, and if this continues to stay, I
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  it's not going to bode well for the incumbent. Hey, So yeah,
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  like, let's not get political about it. But certainly the mood of the
• 5:00
  country is extremely sour. When you see Trump go into you know, South
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  Bronx and New York and really hit the ball out of the park, that
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  tells me there's something going on here in the country. Attitude and things are
• 5:19
  changing here. I don't know if they're for the better or worse. Like
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  I say, I'm just making an observation, not based upon the polity,
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  just upon the optics and the appearance of what's happening here. And know,
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  hey, Florida is booming here. So everybody thinks the world's fine because most
• 5:40
  people don't look at the bigger picture. They look down the street. But
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  Florida as well. Inflation is definitely a factor here, more so than in
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  other states, because housing prices have not headed down, and housing it has
• 5:56
  become more and more unaffordable. Right. Yeah, And when you take all
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  of that into account. Let's just take a step back for a second,
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  and what have people been through the last three years. They've been through a
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  pandemic where they were locked in their homes for approximately a year, not everywhere
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  in the country, but certainly a good portion of it. And then after
• 6:16
  that there was a recession, and then after that there was inflationary measures.
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  So people have been through a lot in the last three years. I mean,
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  this is no This has been no joy run for anybody. Even in
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  the most conservative of states, where there was the most freedom, even they
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  have gone through a tough time. So you're, you know, the average
• 6:38
  person is looking for relief and they're saying, hey, listen, we're doing
• 6:42
  our part. We didn't start the pandemic, we didn't start the recession,
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  we didn't cause the inflation. But we have been the ones asking to adapt
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  to all of it, and we had no control over which direction all this
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  went in. Well, guess what come November, they're going to start exercising
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  control. Hey, And yeah, Like, like I said, I don't
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  want to get into the politics. It's more the food of the country.
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  What that means, And do you think that until the election happens we're kind
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  of going to be in this like dismal kind of holding pattern. Well,
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  I think I think you're going to see the Federal Reserve and the current administration
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  doing anything they can to provide relief, and you're going to see that there
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  are just certain economic forces that are heading in such a direction that it's going
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  to be hard to you know, it's going to be hard to fight.
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  I mean, we are short six million homes right now. So if we
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  all stop buying homes and we told all the builders go at it, go
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  get them. They have to build six million homes just to catch up to
• 7:46
  the demand, that's going to keep prices high. Right. We are short
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  two hundred and fifty thousand truck drivers. Well, yeah, almost everything we
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  have in our life touches a truck at some point, and two hundred and
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  fifty thousand. We're two to fifty thousand short right now. So that just
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  means get moving things from point A to point B. Buying a house or
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  you know, cars, the fuel that you put in them, that's all
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  going to be more expensive. And those are the things that we feel every
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  day. And so that's yeah, there's just forces you can't control, you
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  know, the supply chain is not all the way back. It's still a
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  bit fragile. You know, we have the incident in Maryland at the bridge
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  the Suez Canal, Panama Canal. There's a drought at the Panama Canal where
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  they going. They're down forty percent of their capacity on a daily basis.
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  It just makes things order to move around as quickly as we're used to.
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  And so right now there's inefficiencies that are just beyond everyone's control. And the
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  whole thing going on in the Red Sea with the Houthi rebels which has caused
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  the companies to have to ship around the Horn of Africa and that adds ten
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  days to off and all this taken as a whole. Yeah, like you
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  said, Panama, the ships are backed up, they're having a drought,
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  the lake levels low, and yeah, so isn't this going to have the
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  effect of the further diminishing globalization? Don't you think that's the end result?
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  Well, if you are the owner of a small to mid size business and
• 9:22
  you have the flexibility to you know, get a new sourcing for your materials
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  or buy from a different vendor, you have the ability to be a bit
• 9:31
  more agile than some of the larger ones. So I would see small to
• 9:35
  mid market business community making some of these moves. So they don't always buy
• 9:41
  from Asia, they buy from the Middle East, or they buy from Africa
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  or Europe or domestically, you know, in our hemisphere. So you're going
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  to see some moves like that, just so people can de risk their supply
• 9:56
  chain and their businesses. So yeah, you'll see some of them, for
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  sure. I find the whole thing fascinating because this is really uncharted territory.
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  We never had this globalist economy before, and you know, it all gets
• 10:09
  up going and look, the consumers benefited from this, There's no question about
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  it. Your consumer. But we could debate the quality of goods that come
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  from other places like China, but this is a golden era for consumers,
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  and in some ways it still is. But once you pull back from the
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  globalization, that diminishes consumer choice and then you know, like maybe you have
• 10:35
  one thousand vendors on the Amazon of a particular good shoes, whatever, then
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  maybe you're only going to have fifty, so it cuts your choice and with
• 10:45
  that, prices are going to go up. Right, Yeah, there's no
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  question about it, no question about it. So the it is a it
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  is a challenge, it's it's it's a bit of a shakeout of the market,
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  if you will, and a good one. You know, these are
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  the sort of thing if everything's perfect, we tend to leave them alone.
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  But they're not. So things are going to evolve and we're going to see
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  a slightly new way of doing business over the next few years that is going
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  to hopefully overcome some of the challenges that are in the current system. So
• 11:16
  I wanted to talk to you about AI, all right, because that fits
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  in here with this. And it looks like in another few years, you
• 11:26
  won't be driving your car, you know, the car will drive you.
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  It'll be a robot on wheels. Everything is heading to this. I don't
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  know if you saw the commercial or the video of that robot giving the guy
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  an apple. You know, the guy says, I'm hungry, and he
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  picks up the robot picks up an apple and hands it to him, and
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  they says, clean this place up, and the robot puts the ditchs the
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  dishes in a rack, and then he goes to the robott, how do
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  you think you did? And the robot answers them back conversationally. I think
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  I did pretty good. You said you were hungry. There was no other
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  food here but the apple, so I gave it to you. You said
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  to clean up, so I stacked up the dishes. I mean, man,
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  if I could have gotten one of my wives to do this, I'd
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  still be married. There you go. Well, AI is going. It
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  is definitely a game changer, and the tasks that don't require our highest and
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  best use or our highest skill are going to be done or are going to
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  be automated or eliminated or be done robotically. There's no questions about it.
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  Okay, So like driving, you know, the thing of being a driver
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  is the largest quote unquote profession career in the country, whether it's limo,
• 12:43
  uber, uh, tractor trailer, you know, dropping stuff off. So
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  what are those and there supposably there's ten million people doing those jobs. What
• 12:54
  are those people going to do? Carl? Well, you're over time,
• 12:58
  We're going to you know, there'll be types of driving jobs that will be
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  eliminated. Well, look, if you put two hundred and fifty thousand trucks
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  on the road right now that were autonomous, that's still that only covers the
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  shortage of drivers. So we're a long way away from every driver being out
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  of the job. And you know, no matter how much you autom me,
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  the last mile is still a challenge. So there there will be jobs
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  for truck drivers for the short routes. It's going to be you know,
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  driving across the country and on major shipping lanes that they can autom me,
• 13:33
  but not necessarily. You know, someone try to get around New York City.
• 13:37
  That's that didn't think a little bit more time for that. That's a
• 13:41
  three point zero exactly. Yeah, I mean I use it myself. I
• 13:46
  got a Tesla and I don't have the latest, latest version yet that's coming
• 13:50
  any day. But man, like, this thing is really good. Although
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  yesterday it made a left turn into oncoming traffic into a entrance of a parking
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  lot. That scared the hell out of me. It really did, because
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  it just came out of nowhere. It just did it instantly, and I
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  was like, that shouldn't happen, right, And there's gonna be mistakes like
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  that that happened. You know, they're gonna have to they'll overcome that.
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  But there are definitely mistakes that happen. Yeah, But all in all,
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  a net plus the lowers the costs, right, because you know, the
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  more robots you have in the factory and the more the more autonomous production you
• 14:33
  have, the lower the price of goods. So maybe that'll make up for
• 14:37
  the globalization, I guess, is what I'm getting at. Yeah, well,
• 14:41
  and bactor, we can run twenty four hours a day, Yeah,
• 14:43
  yeah, twenty four to seven. And this robot might have taken coffee breaks.
• 14:48
  I don't know, maybe he's programmed to take coffee breaks and probably complain.
• 14:54
  You know, it's like as a boss, you got to miss the
• 14:58
  complaining and the the constant think, you know, harassment, the to and
• 15:03
  from your employees, right right off? Yeah, So all right, So
• 15:09
  when we have this conversation next year, where do you think this whole AI
• 15:13
  thing is going to be? Where do you think it'll progress to? Well,
• 15:16
  chat GPT five point zero is supposed to come out, and it's supposed
• 15:20
  to be as revolutionary as the other as the other versions, and it's supposed
• 15:24
  to dwarf what we see in four point zero. So I think you're going
• 15:28
  to start to see things that are already information related being automated. I think
• 15:35
  that's going to be the next step. Then you're going to see like mash
• 15:37
  transportation that will be automated. It's going to take a while to get down
• 15:41
  to the individual consumer, but I think we're definitely heading in that direction,
• 15:45
  and I think a year from now we're going to see a lot more autonomous
• 15:48
  cars on the room. Yeah, definitely. And you know, I look
• 15:52
  at it like there's certain problems that we have, like the traffic light problem,
• 15:58
  right, and that AI right now, it's it's not AI running the
• 16:03
  traffic lights. It's basically an algorithm, right, and it's based on stuff
• 16:08
  in the road. But once the AI goes into something like that and really
• 16:15
  optimizes it, you know, everyday problems like that, seems like they're going
• 16:22
  to have an elimited handle better. Right. So all right, hey Carl,
• 16:26
  we find you at carlgoul dot com. Howelse do oldgoul dot com.
• 16:30
  Best way to get me? All right, Well, appreciate you coming on.
• 16:33
  I always enjoy our talks, and we'll talk to you in a month
• 16:37
  or two and see where this once. You know what, when chat GPT
• 16:41
  five point zero comes out, we will use it for a little bit and
• 16:45
  we'll talk about it. Okay, for sure, looking forward to it.
• 16:48
  All right, Hey, you got a question for Carl myself kl at Carrie
• 16:52
  Lutz dot com. Linked to carl site is in the show notes to this
• 16:56
  interview on Financial Survival Network dot com. While you're there, please side up
• 17:00
  for your free newsletter, got one going out shortly. Always a pleasure.
• 17:04
  Take care, Carl, Thanks Kerry, thanks for listening to Carry Lenz's Financial
• 17:08
  Survival Network, your solution to today's trying times. For the latest, go
• 17:15
  to Financial Survivalnetwork dot com. Financial Survival Network now more than ever,