The reality: Tariff-driven grocery price hikes have been relatively modest so far this year.

• Food and beverage prices rose 2.9% YoY through mid-May, up from 1.7% a year earlier, per Circana.
• While tariffs haven’t caused a major inflation spike, supply-side shocks—like drought, avian flu, and extreme weather—have pushed up prices on staples such as coffee, eggs, and chocolate.

The perception problem: Even without sharp increases at checkout, the psychological toll of economic uncertainty and trade-related volatility are making consumers more cautious and value-focused.

• That shift is already showing up in the data: Unit sales of core nonfood CPGs are nearly flat year to date and dipped 0.3% in Q2, when some of the most aggressive tariff actions—like the so-called “Liberation Day” duties—rolled out.
• Inflation anxiety adds to that caution. Consumers expect inflation to ease but not vanish—median one-year-ahead expectations dipped to 3.2% in May, still well above the Fed’s 2.0% stability target, per the New York Fed.
• 25% of consumers who use BNPL are financing groceries, up from 11% last year, suggesting that they’re feeling strained, per LendingTree.

What’s next: More price pressures are coming.

• The Trump administration’s new 50% tariff on imported steel and aluminum could push up grocery prices. Canned staples like tomato soup and pineapple may rise 9% to 15%, per the Consumer Brands Association. Beer prices are also likely to climb since 76% of US packaged beer is sold in cans.
• Switching to alternatives like glass isn’t a simple fix and carries risk given how quickly policies can change.

Our take: Grocers are in a tough spot. Tariffs haven’t led to major price hikes yet, but that’s likely to change soon as duties push up costs on goods like seafood, alcohol, and produce. And even before those increases take effect, shoppers are becoming more cautious, more price-sensitive, and quicker to trade down or skip nonessentials altogether.