Tariffs Today — while we wait

Consumers are expressing uncertainty about tariffs, but until price impacts become visible at retailers, consumers may focus on headwinds like continued price elevation.

Understanding those headwinds and planning for tariff-impact scenarios are what every retailer and manufacturer should focus on while we wait for tariffs’ realities to reach the consumer.
 
Understanding the price sensitivity for each major category is critical. Consumers tend to accept 10% to 12% price elevation without blinking. Retailers will likely seek to promote their way out of tariff pushback from consumers. Some companies are already using “no tariff pricing” marketing campaigns to capture attention.
 
Manufacturers, suppliers, freight forwarders and brokers are likely to feel tariff impacts more strongly than retailers — and indeed, some already feel them. The shift in inventory and supply chain is already affecting certain longer-lead categories, even before we see whether the tariffs fully materialize. In some categories, pull-forward purchasing is showing up.

Manufacturers are also holding some product until next year, essentially waiting out the storm on seasonal goods. Retailers will look for “must-have pricing” at wholesale to hedge against consumer price sensitivity and ensure profitability. As a result, consumers can expect fewer promotions. 

Larger retailers will be in a better inventory position to grab market share. Consumers will prioritize their purchases, and kids will come first in those decisions. During initial tariff pricing, consumers will be willing to forgo their usual purchases or trade down or over to a new brand.

Scenario planning should strategically emphasize nimbleness. Retailers should verify and reverify news relating to tariff actions and monitor exclusion updates daily. As freight space will likely be at a premium like it was during the pandemic, collaborating with brokers early is important. 

Supplier dialogue to explore extending credit beyond the current terms will likely be met with a reasonable response, as suppliers, too, are looking to maintain their business.