Dive Brief:
- Amid the global trade war and the looming threat of more tariffs, 82% of surveyed U.S. consumers said they believe tariffs will affect the prices of essential goods, according to new findings by personal finance company Intuit Credit Karma.
- For those everyday goods, a majority of consumers said they expect groceries and food items to see the highest cost increases resulting from tariffs, followed by electronics and appliances, vehicles and auto parts, and gasoline and energy.
- The ways consumers are shifting their shopping behavior in anticipation of tariffs vary among age cohorts and income brackets, the findings show.
Dive Insight:
While half of U.S. consumers said they have changed their spending habits in anticipation of tariffs, more Gen Z and millennial shoppers reported changes than other age cohorts, according to the findings. The study, which was conducted by Qualtrics on behalf of Intuit Credit Karma, is based on responses from 2,074 consumers between Feb. 27 and March 11.
Shoppers overall are making a variety of shifts to their buying habits. Sixty-two percent said they are reducing spending on non-essential goods, and 55% are switching to cheaper alternatives like store brands or secondhand items, Intuit Credit Karma found. A smaller percentage (43%) of shoppers said they are stocking up on certain items due to concerns that prices will increase, and 29% said they are buying more domestically made products.
Income also appears to impact how shoppers plan to respond to tariffs. Households with income below $50,000 were more likely than those with higher incomes to say they are unwilling to change their spending unless they actually see prices change. This is likely because people who earn less deal with more financial instability and don’t have the flexibility to cut back, according to the findings.
The ongoing trade war between the United States and other countries has fueled industry concerns that imposed or threatened tariffs could raise grocery prices for certain items and contribute to higher food inflation. Canada and Mexico — two countries targeted by the Trump administration’s tariffs — are major exporters of agricultural products to the U.S.
In February, food-at-home prices increased at a 1.9% annual pace and overall inflation cooled to a rate of 2.8% — its slowest annual pace since November — according to the latest Consumer Price Index data.
“Imposed and pledged tariffs come at a time when consumers are grappling with an elevated cost of living, so we’re seeing many people take precautions to protect their finances in anticipation of potential price increases for certain consumer goods,” Courtney Alev, consumer financial advocate at Credit Karma, said in a statement.
