Target CEO on Inflation: 'We're taking it one quarter at a time'

In an interview with Yahoo Finance's Brian Sozzi, Target CEO Brian Cornell discusses how the company is dealing with inflation.

Video transcript

BRIAN SOZZI: Brian, you've led target for seven years as CEO. But I remember when you were still at PepsiCo. You've seen a lot of business cycles, a lot of inflationary cycles. In terms of what we're seeing right now, is this the worst inflation environment you have ever seen in your career?

BRIAN CORNELL: You know, Brian, we see these things happen from time to time. And I think for us and for our team, this is a chance for us to leverage our scale, make sure we're taking advantage of our multi-category portfolio, leveraging the role that our own brands and national brands play, and really lean on the expertise we have in place today, the expertise we have in sourcing, the work our supply chain teams are doing, the work our merchants do each and every day, and importantly, the work our store teams do and our digital channels provide to make sure, even in an environment like this where we all saw the September CPI numbers--

We've got to make sure that we leverage all of those components that continue to deliver value to our guest each and every time they shop at Target. So we're looking at ways to make sure that, as we plan for the holiday season, we continue to stay focused on delivering great affordability and value to our guests who are going to depend on that from Target each and every time they shop.

BRIAN SOZZI: Your customer is so price-sensitive, Brian. Who will bear the brunt of this inflation we are seeing? Look, Kimberly-Clark out this morning warning of even higher levels of inflation compared to where they were a couple of months ago. They're, of course, the makers of Kleenex. Does Target bear the brunt of this inflation, or you're going to have to pass this onto the shopper?

BRIAN CORNELL: Well, Brian, as you might imagine, this is a time for us to work together with our vendor partners, think about how we leverage our national brand relationships, our own brand performance to really make sure that, even in an environment like this, we deliver great value for our guests. And we've done that all year long.

And I look at the assortment we've provided our guests during the Halloween season. We wanted to make sure there was great affordability in that assortment. We'll do the same thing during the holidays and make sure that we provide great value for the millions and millions of guests that are shopping our stores or our digital channels each and every week.

BRIAN SOZZI: Where do you come out on inflation, Brian, in terms of the outlook? Is it in fact transitory? i sat down with P&G's incoming CEO John Mueller last week. And they're looking at their third round of price increases. Do you see the growth rate in inflation slowing into next year?

BRIAN CORNELL: Well, Brian, we're going to take it one quarter at a time. And obviously, we talked to many of our vendor partners. They have seen pressure in their costs and in labor. And we've talked with many of them about the actions that they're taking. But we certainly expect this to modify over time. But each and every quarter, this is what we do for a living, working with our vendor partners, looking at our portfolio, looking at the assortment, and making sure that, even in times like this, we continue to deliver great value for the guests.