EXCLUSIVE Q&A: Batteries Plus takes on tariffs
Batteries Plus is utilizing strategy and technology to keep its supply chain running smoothly and profitably in the face of unpredictable tariffs.
Chain Store Age recently spoke with Kirtis Hill, chief merchandising & supply chain officer, Batteries Plus, about how the rapidly growing specialty battery retailer is proactively adjusting its supply chain operations to ensure it avoids any severe issues resulting from a shifting set of tariffs President Donald Trump has been placing on imports from Canada, China and Mexico.
Hill also touched on how the retailer is handling reduced government support for battery-powered electric vehicles. Batteries Plus added more than a dozen new stores to its development pipeline in the third quarter of 2024, furthering its continued growth as it seeks to support franchisees with innovative solutions, expanding into new markets.
[READ MORE: Batteries Plus adds 16 stores to pipeline in Q3]
How is Batteries Plus adapting its supply chain to tariffs?
It's no longer about having a backup plan. Companies now must have a plan A, B, C and D to be prepared for country- or region-specific tariffs. During the past year, we have doubled the number of countries we have suppliers in and continue to evaluate new regions.
We have also given preference to certain suppliers: These include suppliers with factories in multiple countries, that have a U.S. presence or plans to expand here, or that are in countries with a trade surplus or a smaller trade deficit with the U.S.
What is Batteries Plus doing to minimize the impact of production cost changes?
We are looking at our full supply chain from end to end to reduce costs. Some initiatives Batteries Plus is taking include actively participating in sourcing activities to reduce both product costs and future risk, minimizing trans-oceanic freight and drayage costs, optimizing inventory to reduce product storage and carrying costs, and enhancing warehouse space planning to reduce reliance on 3PL services.
In addition, we are making efforts to improve labor training and retention to reduce labor costs and evaluate domestic transportation cost and service opportunities.
How is Batteries Plus responding to the reduction of government support for electric vehicles?
Electric vehicles require a 12-volt battery, and we have seen an increase in demand for those batteries as the market matures. The average age of electric vehicles on the road continues to grow, increasing the demand for lead acid batteries.
Whether their car is an electric vehicle or has an internal combustion engine, customers come to us because we have the expertise to provide them the correct battery for their vehicle.
What advice do you have for retailers facing tariffs and other supply chain disruptions?
I would recommend embracing flexibility and staying active in sourcing and procurement activities. In addition, retailers dealing with these issues should utilize technology to increase visibility, tracking, and cost transparency.
Furthermore, retailers facing tariffs and supply chain disruption need to strengthen their strategic partnerships by sharing both short- and long-term goals with their partners to ensure that priorities are properly aligned.
Editor’s Note: Founded in 1988 and headquartered in Hartland, Wis., Batteries Plus operates over 700 locations in 46 states and Puerto Rico and is owned by Freeman Spogli, a private equity firm based in Los Angeles and New York City.
