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CEO Marvin Ellison said on a May 21 revenue call that despite the pressure on tariffs, Lowe aims to maintain competitive pricing in the home improvement market.
In addition to the portfolio pricing approach, Ellison also noted that Lowe's price management tools will help "browse any environment."
Ellison added that Lowe's has also established relationships with suppliers over the past six years. “This is when these relationships start to pay off,” he said.
Lowe's has made strategic efforts to diversify its supply chains to cope with the impact of U.S. tariffs and ongoing trade tensions, executives said on the phone.
In April, the Trump administration announced plans to impose reciprocity tariffs on several countries. These responsibilities have since been suspended, but plans are soon to return to some trading partners. Currently, an additional 30% tariff rate will be paid for by imports from China.
Sales Bill Boltz told analysts that about 60% of Lowe's purchases originated in the United States. This percentage is equivalent to about $30 billion per year.
According to Boltz, China accounts for a smaller purchase share of 20% of purchases, including goods such as small appliances, tools and ceiling fans. He added that despite the reduced dependence on the country, Lowe's dependence remains "unsatisfied" with the current procurement portfolio.
Ellison said that over the past few years, the global procurement team of home improvement retailers has been working with their private and national brand suppliers in search of further global diversification opportunities.
Part of the strategy includes a disciplined approach to analyzing inventory portfolios, taking into account individual SKUs, product categories, line structures and various categories to assess “meaningful future progress.”
"And, you can imagine the level and magnitude of work required when you have to go to Sku, the SKU of the supplier," Boltz said.
Another home improvement retailer, The Home Depot, has also developed its approach to tariff-driven cost pressures, noting that it does not intend to raise prices. On the other hand, several retailers, including Walmart, recently pointed out that cracking down on high tariffs may be necessary.
This story was first published in our Procurement Weekly. Register here.