Kroger is closely monitoring how its exposure to escalating tariffs might impact its fresh business, particularly produce, interim CFO Todd Foley said during a March 6 earnings call.
But as a domestic retailer, Kroger has “less exposure” to some duties compared to its peers, Foley told analysts.
The Trump administration paused a 25% tariff for goods covered by the United States-Mexico-Canada Agreement earlier this month. Several produce categories are among the imports free of duties during the pause, which is supposed to be lifted on April 2.
“When you think about some of the produce we might get from Mexico or Canada, those are still pretty kind of mid-single digit effects,” Foley said. “So it's not a massive impact.”
He added that Kroger has a “really, really small, single-digit exposure” to products sourced from China. The Trump administration has raised tariffs on imports from the country by 20% and plans to enact broader reciprocal tariffs in April.
Kroger’s merchandising and sourcing teams, meanwhile, are identifying commodities that can be sourced from suppliers in places less affected by tariffs, said Foley. He also noted that further diversifying its supplier base can help keep in-store prices low.
“Even though it's not a huge impact overall in our business, maybe certainly relative to our peers, it's a great opportunity for us to be proactive and stay out in front of it,” Foley said.
