“Fender increased prices to offset higher costs from tariffs”: Report reveals how Fender is tackling tariffs and a “weaker macroeconomic environment”
President Donald Trump enacted hefty tariffs on the import of goods into the United States from countries around the world earlier this year, and they’re continuing to have a heavy impact on guitar manufacturers, including Fender.
Instrument and gear brands have been continually speaking out about the impact of these high tariffs on the guitar trade. Fender’s Executive Vice President Of Product, Justin Norvell, even travelled to Washington earlier this year in an attempt to mitigate the “devastating” impact of the global tariffs alongside industry figures including NAMM’s John Mlynczak and Gibson’s Erin Salmon.
READ MORE: Are your favourite guitar strings about to get more expensive? D’Addario expects to incur more than $2 million in tariffs this year as a result of US trade policy
According to a new report from financial information and analytics expert S&P Global [via Guitar World], Fender increased prices throughout the first half of the year to offset higher costs from tariffs, “especially from China, which makes up 40 percent of purchases (half of which enter the US).”
The report further claims that the Big F implemented a five percent price increase in July across its entire portfolio to tough out the financial challenges of the enacted tariffs, but also, it acknowledges the impact of a weaker economy on the business, and explains how sell-in habits – the sales from manufacturers and dealers – affect the brand.
The report states, “Sell-in has exceeded our expectations for retail partners like Guitar Center, SweetWater, and Amazon, as higher-income consumers continue to value the Fender brand.”
Despite this, it also notes: “Nonetheless, volumes continue to decline due to lower consumer discretionary spending, which we expect will continue throughout the remainder of the year. For example, smaller locally owned US dealers continue to tightly manage inventory amid a weaker macroeconomic environment as consumers trade down to the second-hand market or defer discretionary spending.”
S&P Global also claims that Fender is having some success in regards to its entry-level trade; it believes that Fender is “gaining market share” in low-end guitars due to competitor brands allegedly reducing “imports of low-end guitars from China due to tariff headwinds.”
In summary, S&P states: “In 2026, we expect improving volume trends from new innovations, though we continue to expect subdued consumer sentiment resulting in minimal revenue growth. We expect dealers will remain cautious on increasing inventory levels because of a weak macroeconomic backdrop with lower discretionary spending on big-ticket items like guitars.”
It continues, “We expect management will continue to exercise prudent cost management and limit marketing spending and compensation costs to offset its lower gross profit given a weaker macroeconomic environment.”
View the full product lineup from Fender, or find out more on how Fender and other guitar brands joined forces to try and mitigate the impact of high tariffs.
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Source: www.guitar-bass.net
