Retailers warn of price hikes as tariffs and commodity costs rise

Price hikes are back in focus for American shoppers. From grocery aisles to hardware stores, companies are warning that the cost of everyday goods is climbing again, driven by tariffs, tighter supplies and higher production costs.

Grocery bills drive stress for many families

An AP-NORC poll in August 2025 found nearly 90% of Americans feel stressed about the price of groceries, with more than half calling it a “major source of stress.” That’s a bigger worry than credit card debt, child care or student loans, according to the survey.

Inflation has cooled somewhat over the past year, but signals point to another round of increases. Food makers say they have little choice.

Food makers face rising costs

Hormel cited rising costs for beef, pork and nuts, while J.M. Smucker pointed to steep tariffs on Brazilian coffee beans.

At Hormel, interim CEO Jeff Ettinger said the company is working through the impact of higher commodity prices. He called inflation in inputs like meat and nuts the biggest drag on recent earnings, noting that Hormel’s “Transform and Modernize” initiative softened, but did not eliminate, the pressure.

Ettinger said he expects sales to keep rising in the fourth quarter, helped by the strength of Hormel’s brands. To offset costs, the company is taking “targeted pricing actions,” though he cautioned that profit recovery may not arrive until next year.

Price increases are not limited to groceries.

Ace Hardware, which operates more than 5,000 independently-owned stores across the United States, warned Wednesday that rising costs from tariffs and supply chain disruptions could lead to higher prices on tools, appliances and home improvement products in the coming months.

Retailers brace for tariff impact

As food makers grapple with higher costs, retailers face the challenge of passing some of these increases onto customers while maintaining loyalty.

Walmart CEO Doug McMillon previously warned that President Donald Trump’s tariffs are likely to drive up prices, emphasizing that the company cannot absorb the full impact of these additional costs. During an earnings call in May, he said Walmart has observed “stress behaviors” among shoppers, noting that many are becoming more selective and cautious in their purchasing decisions.

Costco highlighted that grocery items are particularly susceptible to tariff pressures, with food margins described as “very tight.” Company executives reported experiencing inflation on imported fresh products as a result of tariffs and stressed that the global supply chain remains complex and challenging.

At Kroger, leadership noticed that customers are stretching their food budgets, prompting the company to adjust sourcing strategies in an effort to minimize the effects of tariffs. Despite these efforts, the company acknowledged that fresh foods are likely to experience some cost pressures.

Tariffs hit millions of US goods

The Tax Foundation, a nonpartisan research group, reported in July that about 75% of U.S. goods are now affected by Trump’s Friday, Aug. 1 tariffs. The group said the food industry is among the hardest hit, warning the added costs will ultimately show up in higher prices for customers.

The analysis shows the top five food imports facing tariffs are liqueurs and spirits, baked goods, coffee, fish and beer, together worth $46.5 billion in 2024. That means more than 1 in 5 food products brought into the U.S. carried an added cost before even reaching store shelves.

According to the Consumer Price Index, overall food prices rose 3% from a year ago. Eggs, meat and fish climbed even faster, jumping 5.6% between June 2024 and June 2025, U.S. Bureau of Labor Statistics data shows.