Source: GlobalData
US consumers face higher prices, inconsistent dining out experiences amid blanket tariffs, says GlobalData
Posted in Consumer
Following the news that the US National Restaurant Association has joined a host of industry bodies calling for tariff exemptions as costs will doubtlessly be passed on to consumers in the wake of possible Trump administration’s blanket tariffs on all countries;
Hannah Cleland, Senior Consumer Analyst at GlobalData, offers her view:
“Foodservice operators are facing pressure both from tariffs and rising labor costs to a point where costs can no longer be absorbed, and cutbacks will have to be made. The knock-on effects of diminished staffing levels and erratic ingredient pricing and availability will result in a less consistent experience and standard of dining out for consumers. Customer footfall out-of-home is in a precarious position as these developments come against the backdrop of already weakened sales and fierce price wars in 2024 and 2025.
“Operators in the US are likely to feel a pronounced effect as state level wage increases for foodservice workers have rippled through the country, while many specialist format outlets are reliant on importing food and beverages of specific origins. By the end of 2024, the number of US consumers reporting to have cut back on eating and drinking out on social occasions was two percentage points below the global average at 27%*. Operators will be focused on preventing that figure from growing further due to rising costs and potentially falling service and quality standards.
“These new challenges point to a wider need for operational overhauls in foodservice to improve overall efficiency and minimize cost-pressures long-term. Blanket tariffs will affect prices of all goods and potentially create shortages as rising prices create delays at ports and weaken demand and supply of goods. However, a more diversified supply chain both in terms of suppliers and ingredients can cushion the impact. Additionally, there has been a marked increase in automation technology investment in the US to cope with increased labor costs.
“That said, these changes while necessary are not short-term fixes for foodservice. Rising prices for less value will be a hard pill for consumers to swallow when dining out. Operators will have to be transparent about the reasons behind price increases and changes to service to soften the blow to customer wallets.”
*GlobalData 2024 Q4 global consumer survey, 22,000 respondents across 42 countries.