A former retailer says stores can forget about price increases to compensate for rates

Retailers seeking to offset the additional costs of the US-China trade war by raising prices should rethink their strategies, retail consultant and former department store manager Jan Kniffen said on Friday.

"It will not be transmitted because the consumer will not accept it," CN channel Rogers Kniffen Worldwide Enterprises told the "Squawk Box" channel, noting that consumers have not yet seen the news. real negative impact of customs duties.

On Friday morning, the government said retail sales in the United States had increased in May and sales for the previous month had been revised upwards, indicating that buyers had not reduced their spending.

Last month, President Donald Trump raised tariffs of $ 25 billion on Chinese goods, which went from 10% to 25%, which mostly affected retailers of wares. House.

On Thursday, Restoration Hardware's parent company, RH, said it was raising prices for some products to offset the impact of tariffs.

Trump has threatened to apply additional tariffs on Chinese goods worth an additional $ 300 billion, essentially the rest of Chinese imports to the United States, a decision that would then affect clothing stores.

"If you increase the level enough, you could finally see some impact on consumers, and maybe 25% on everything is high enough," Kniffen said.

At the same time, major US retailers, such as Walmart, have probably taken steps behind the scenes to ensure their customers do not pay more for their everyday items, Kniffen said.

"There are all sorts of possibilities for substitution," he said.

"If you are well capitalized, you are a winner because you can invest in the robots needed to reduce costs.If you are small, underfunded and focused on something that is about to get a price, are toasts, said Kniffen.

Last month, Treasury Secretary Steven Mnuchin told Capitol Hill that he had been talking with Walmart executives about how to contain prices during the trade war. Mnuchin also said, at the time, that he had "talked to all the big companies that supply consumer goods".