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Retailers Stock Up to Blunt Tariff Hit; Food Makers Pressed to Dye Naturally By Mark R. Long

Everything from sneakers to kitchenware is stacking up in warehouses as retailers stockpile goods, hoping to blunt the impact of the Trump administration's new tariffs.

The WSJ Logistics Report's Liz Young writes that warehouse chain Costco Wholesale, home-goods retailer Williams-Sonoma, apparel seller Zumiez and others are building up their inventories after placing unusually big orders to get ahead of shifting tariff deadlines .

In their latest quarters, Costco's inventories were up about 10% compared with the previous year, Williams-Sonoma's were up 6.9% and Zumiez's were up nearly 14%. The Logistics Managers' Index, a monthly survey of supply-chain managers, showed inventory levels expanded in February at the fastest rate since June 2022.

While beefing up stocks could hedge against the costs of new duties, logistics experts say it opens up the risk of companies getting stuck with piles of unsold goods as consumers spend less. The tactic marks a shift in retailers' yearslong efforts to perfect inventory-management strategies after the pandemic. Many had moved toward managing inventories on a just-in-time basis over the past year and a half to avoid getting stuck with goods shoppers didn't want. Some are now switching instead to a just-in-case strategy and keeping extra stock on hand.

President Trump said he might soften reciprocal tariffs he plans to impose on U.S. trading partners next month, and that some nations might be exempt. (WSJ) The European Commission's trade enforcer, Maros Sefcovic, is set to meet his U.S. counterparts this week in an effort to de-escalate a looming trade spat. (WSJ) CONTENT FROM: PENSKE LOGISTICS Gain a Closer Look. Gain Ground with Penske Logistics.

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Outbound Number of the Day Food Manufacturing

A push to curb the use of artificial dyes in food led by Health Secretary Robert F. Kennedy Jr. presents a logistical challenge for food makers that have used the colorings for decades to brighten popular pantry products.

An analysis of federal data by the Journal's Jesse Newman, Andrew Mollica, Roshan Fernandez and Elizaveta Galkina found more than one in 10 products contain at least one artificial dye, with more than 40% of these products having three or more. Removing the ingredients won't be easy . Artificial dyes can be produced consistently, have long shelf lives and can be difficult and expensive to replace with natural colorings.

Because naturally sourced colorings can be sensitive to heat, light and changes in acidity, and since their complex supply chains are susceptible to droughts and other events, natural dyes can cost manufacturers about 10 times more than their artificial equivalents.

The Food and Drug Administration in January banned the use of Red No. 3 , an artificial dye linked to cancer in animals. (WSJ) Quotable In Other News

U.S. economic activity expanded at a faster pace in March as strength in services offset an unexpected downturn in manufacturing. (WSJ)

Europe's economic activity barely grew this month as the continent braces for U.S. trade tariffs . (WSJ)

Global energy demand surged at a faster pace last year as record-high temperatures fueled the need for cooling systems. (WSJ)

Hyundai plans to build a nearly $6 billion steel mill in Louisiana to support more auto production in the U.S., aiming to reduce exposure to complex global supply chains. (WSJ)

An appellate court slashed the punitive damages transportation-equipment maker Wabash National owes in litigation tied to a deadly trailer crash by more than 75%. (WSJ)

Switzerland's SGS is looking for acquisitions in the U.S. , betting an industrial renaissance will lift demand for its testing, inspection and certification systems. (WSJ)

Building materials company James Hardie Industries agreed to buy AZEK, a maker of home decking, railing and pergolas, in a cash-and-stock deal worth $8.75 billion. (WSJ)

Plenty Unlimited, a vertical-farming startup backed by Jeff Bezos and other well-known investors, filed for bankruptcy and is seeking a capital infusion to restructure. (WSJ)

A.P. Moeller-Maersk's APM Terminals will invest more than $500 million to improve its Elizabeth, N.J., terminal after it agreed to a 33-year lease extension with the Port Authority of New York and New Jersey. (Journal of Commerce)

Solar companies Suniva and Heliene reached a deal with Corning to domestically produce solar modules made with polysilicon, wafers and cells manufactured in the U.S. (Supply Chain Dive)

About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at . Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 25, 2025 07:07 ET (11:07 GMT)

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