Tariffs’ effects on the grocery industry

The Trump administration’s ongoing trade war with China may affect retailers’ annual holiday income, with consumers showing growing concern about the impact of tariffs on the prices of some holiday items, including groceries.

According to a survey of more than 1,000 U.S. consumers from enterprise retail software provider JDA, a leading 51% of respondents are concerned about how tariffs will affect electronics prices, followed by apparel (29%), food/grocery (23%), household items and appliances (22%), footwear (21%), and toys (16%).

The survey also revealed that looking ahead to the 2019 holiday season, close to half of the respondents (46%) plan to spend slightly or significantly less this year due to tariffs. The same percentage say tariffs will have no impact, while 8% plan to spend slightly or significantly more for the holidays as a result of tariffs.

Uncertainty about tariffs is also poised to shift the timing of consumers’ holiday purchases. Approximately 17% of respondents plan to do all their holiday shopping earlier to avoid higher prices, while 31% plan to shift some of their holiday shopping earlier. Another 31% say tariffs will not impact the timing of their holiday purchases, while 21% are undecided.

Considering that private branded consumer packaged goods often cost less than national brand products, more consumers could turn to store brands for their grocery needs this holiday season.