While tariffs work their way into the vocabulary of everyday Americans, the complexity of global trade will be hard to pinpoint for our industry.
The complexity of our supply chain means it’s highly unlikely there won’t be some level of impact. Our suppliers procure raw goods and materials from a diverse set of partners, so as inflation was to 2023 and 2024, tariffs will be the buzz word for 2025.
As of this moment, a shifting set of categories and deadlines with the administration’s tariff policies looms over the marketplace, so pinpointing the exact impacts is murky at best.
Where I do see some clarity is in consumer confidence and spending habits.
As inflation was a concern on the consumer in recent history, this continues forward with this new watchword. Just as we may not be sure how it will impact our industry, as a consumer, a homeowner and vehicle owner, just how will this impact my personal finances and spending habits?
Are we going to see struggles in indulgent purchases? Will we see lowering interest rates for borrowing cast a shadow on new vehicle purchases or investments in EV?
Federal trade policies have a ripple effect that can last much longer than the policy itself. How does this impact the consumer-buying habits for everyday goods?
My forecast is that’s what we’re looking at here. Soft consumer confidence and insecurity at a molecular level will find every crack in the sidewalk to seep into, which will be tough for our industry to point directly to but will undoubtedly be a headwind we will face.
We’ve already seen in standard c-stores a shrinking of categories such as paper, pet, cleaning and grocery sets. Where c-stores were the fill-in grocery store for decades, enjoying a mix of immediate and future consumption customer transactions, will increasing grocery prices put pressure on the industry from the large grocery club stores (Sam’s and Costco)?
Based on our wholesaler partner volumes and our own volumes, it’s hard to compete in those categories, so I know I’ll be watching trends carefully to ensure we adjust our space allocation accordingly.
Regardless of actual impacts, I think consumers will be looking for value where they can. This is something our industry has historically done a good job in promoting, and despite the “cost of convenience,” this retailer continues to think we’re well positioned to once again adjust the sails and carry forward despite what stormy seas may be ahead.
Steve Morris, president of St. Paul, Minnesota-based Retail Management Inc. Reach him at smorris@retailmgmtinc.com. Retail Management Inc. handles the operations, marketing and accounting functions for any small-format retailer including convenience stores and truck stops, vape shops and liquor stores. Operations include staffing and supervising, product replenishment and ordering and vendor negotiation.
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