Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News
Sponsored By
Trump tariffs could mean empty shelves at the grocery storeTrump tariffs could mean empty shelves at the grocery store
Nearly two-thirds of produce sold in the U.S. could face 25% price hike
6 Min Read
One of the biggest immediate concerns for grocery chains is the stockpiling shoppers are likely to engage in to buy products before the tariffs go into effect.Shutterstock
Retail operations across the nation were scrambling on Monday to address the impacts massive tariffs on Canada, Mexico, and China will have on their business.
Both the grocery industry and its customers were working to make sense of the trade war waged against the U.S.’s biggest trade partners.
Grocery Industry analyst Phil Lempert told Supermarket News that if the tariffs are enacted — that’s 25% for Canada and Mexico and 10% for China (above China’s pre-existing tariffs) — “it’s going to decimate our food world.”
Lempert noted that 63% of produce and 47% of fruits and nuts consumed in the U.S. come from Mexico. Lempert added that more than a third (34%) of meat consumed here and 60% of crude oil used comes from Canada.
“So if we look at those kinds of numbers, not only is the price for consumers going to go up, but this is a major global disruption,” he said, noting that the typical family could pay an estimated $4,250 on goods and services.
Lempert said one of the biggest immediate concerns for grocery chains is the stockpiling shoppers are likely to engage in to buy products before the tariffs go into effect. “And when it comes to produce, I'm very fearful we're going to go back to what we saw during the pandemic and that's empty shelves in the produce department,” he said.
Other impacts are likely to include a reduction in the number of SKUs in the store. That could hit products like garlic — Lempert noted that 90% of the world’s supply comes from China.
The roller coaster continued Monday morning with the Trump Administration appearing to have put the brakes on the plan to impose a 25% tariff on Mexico, following a post on X.com from Mexican President President Claudia Sheinbaum.
Sheinbaum said the two countries reached an agreement to postpone the tariffs as officials “begin working today on two fronts: security and trade.”
“Mexico will immediately reinforce the northern border with 10,000 members of the National Guard to prevent drug trafficking from Mexico to the United States, particularly fentanyl,” Sheinbaum wrote. “The United States is committed to working to prevent the trafficking of high-powered weapons to Mexico.”
Price hikes on U.S.-produced commodities could also slow sales, due to retaliatory tariffs imposed on the U.S., according to Lempert.
“If you look at the first round of tariffs in Trump's first administration … China stopped buying soy,” according to Lempert. “And basically we had to fund those farmers billions and billions of dollars to make up for that loss.”
Those tariffs are already set in Canada, where the government announced on Saturday that it, too, will impose a 25% tariff on $155 billion worth of U.S. goods. On Monday, the Canadian government released an exhaustive list of products that would face tariffs, including hundreds of grocery products such as turkey, poultry, milk, yogurt, honey, nuts, citrus fruits, coffee, spices, molasses, chocolate, and more.
That’s creating major headaches across the industry, which is taking a measured approach in weighing in on the tariff battles.
National Grocers Association (NGA) President and CEO Greg Ferrara said in a written statement on Monday that the association is “deeply committed to serving their communities while the Trump Administration works with our trading partners to address border and trade concerns.”
“We are hopeful these issues will be resolved quickly to minimize the impacts felt by American consumers who remain affected by elevated prices,” Ferrara said. “NGA looks forward to working with the Administration to reduce costly regulatory burdens and revitalize Main Street businesses that have been strained by decades of lax antitrust enforcement, effectively allowing big box chains to dominate markets at the expense of local competitors and communities across the country.”
Also on Monday, National Retail Federation Executive Vice President of Government Relations David French released a statement opposing the tariffs but supporting the administration’s “goal of strengthening trade relationships and creating fair and favorable terms for America.”
French said imposing steep tariffs on three of the U.S.’s closest trade partners is a “serious step.”
“We strongly encourage all parties to continue negotiating to find solutions that will strengthen trade relationships and avoid shifting the costs of shared policy failures onto the backs of American families, workers and small businesses,” he said. “The retail industry is committed to working with President Trump and his administration to achieve his campaign promises, including strengthening the U.S. economy, extending his successful Tax Cuts and Jobs Act, and ensuring that American families are protected from higher costs.”
Supermarket News also spoke with Pennsylvania Food Merchants Association President and CEO Alex Baloga on Monday, who said the association is “keeping a close eye” on the trade war.
The industry is concerned about price increases, Baloga said. “We appreciate that the administration is working also to reduce regulatory burdens and tackle tax issues. We understand and appreciate that aspect of what they’re doing,” he added. “Our organization and members are committed to working with policymakers to address the issues and that’s where we are in a nutshell.”
Grocers are not the only industry worried about the Trump tariff plan. Lempert said convenience stores and restaurants will also be hit hard by the tariffs. “It's going to affect c-stores, it's going to affect restaurants, anybody who sells food. There's no question about that,” he said.
In addition to food and packaged goods, that impact to c-stores could take the form of gasoline price hikes, according to Brittain Ladd, a supply chain and strategy consultant.
Ladd told Supermarket News on Monday that gas could go up as much as 15 cents a gallon due to tariffs on oil imports from Canada and Mexico.
Additionally, Ladd explained that c-stores and grocery stores will have to raise the price on any fruits and vegetables they import to sell in their stores.”
“Prices could increase as much as 15% or more,” he said.
He had a rosier outlook on the tariffs, noting that he believes “they will not be in place long enough to cause much disruption.”
“Trump is using tariffs as more of a way to get Mexico and Canada to negotiate new trading deals vs. wanting to keep tariffs in place for a long time. Nobody wins a tariff war,” Ladd said.
About the Author
You May Also Like
