- About 60% of shoppers say they’ll adjust where they shop if the Trump Administration’s proposed tariffs on Chinese imports go into effect, according to a survey from rewards app Shopkick. The company surveyed more than 30,000 of its app users.
- Of those surveyed, 44% said they would cut back on shopping, while 25% would switch to buying products made in America. Twenty-nine percent of shoppers said they’d stock up on goods now.
- Generationally, 74% of baby boomers are aware of the tariffs compared to only 34% of Generation Z. About 40% of millennials said they think tariffs will cost their household up to $500 more over the course of a year.
While food retailers expressed significant concern over proposed tariffs on Mexican imports earlier this summer, which were ultimately suspended, tariffs on Chinese goods won't hit the grocery industry as hard as other retail categories. The previous tariff proposal focused heavily on produce, particularly avocados and tomatoes.
The latest 10% tariff set to be imposed on Chinese imports September 1 will have a stronger impact on toys, clothes, shoes, electronics and other consumer goods.
Retailers like Walmart, Target and Costco that sell general merchandise, apparel and other nonfoods appear to be the most vulnerable to price increases. But according to investment firm Moody's, these companies have diversified their supply chains and, apparently in anticipation of further tariffs, pre-purchased goods.
Moody's analyst Charlie O'Shea wrote in a note Monday that these major retailers also have significant sway with vendors and can absorb price increases in the short-term.
Competing grocers may feel the sting in departments like general merchandise and housewares. That may force retailers to more closely tie their food and their nonfood offerings through creative merchandising. The Wall Street Journal reports that food companies are seeing higher revenue even as higher prices show up on shelves and in menus.
Looked at a different way, the shopping adjustments consumers make as a result of tariffs could prove to be an opportunity for grocers. Dropping prices on home goods and general merchandise could snag customers looking for a price break.
Despite uncertainty over whether or not tariffs will be implemented, consumers are well-aware of the potential hit to their wallets, and they are planning accordingly. American retailers are making whatever adjustments they can, but many will still have to pass along some of the costs to shoppers if tariffs hit.