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With tariffs driving up the cost of key ingredients and supplies, you’ll need to rethink your pricing strategy. It’s crucial to strike a balance here. Setting higher prices across the board can turn consumers away, but ignoring rising costs can eat into already-thin margins.
Get creative when maintaining value. Bundling items, like a drink, snack, and sandwich combo, can offer perceived value while subtly increasing the average ticket. Using a loyalty marketing strategy can also incentivize repeat business without relying on broad price increases.
Restaurants are already adapting their pricing and sourcing strategies to manage tariff-driven costs. Waffle House, for example, added a 50-cent surcharge per egg to offset higher prices. Chipotle has diversified its supply chain to countries like Colombia and Peru to reduce dependency on tariff-affected regions.
As tariffs continue to drive up costs in the restaurant and c-store industry, businesses must adopt strategies to stay competitive and protect their margins. Here are three effective approaches to help mitigate the impact of tariffs on your operations.
Work closely with your suppliers to secure long-term contracts or bulk deals that lock in pre-tariff rates. This can provide stability for both parties while helping to mitigate the cost increase.
On top of that, increase reliance on domestic and local suppliers. Sourcing products closer to home not only reduces exposure to tariffs but also supports local businesses, potentially boosting your brand's image. Local suppliers often have shorter lead times and more flexibility in adjusting to demand fluctuations, which streamlines operations.
Diversifying your supply chain is also crucial in managing tariff-related risks. By sourcing from multiple countries or regions, you reduce the risk of being overly dependent on one source. This approach offers flexibility in case tariffs are imposed on certain imports, allowing you to quickly switch suppliers without significant disruptions to your business.
As tariffs drive up costs, leveraging customer loyalty programs can be a smart way to maintain spending without losing customers. By offering rewards—such as points for purchases or exclusive discounts—you can offset price hikes and provide added value to your customers. These programs encourage repeat business and reduce the pinch of higher prices.
Many restaurants and c-stores are already utilizing loyalty programs to incentivize repeat business. For instance, Starbucks offers its rewards members personalized promotions based on their purchase history, while grocery chains like CVS use their loyalty programs to offer discounts on frequently purchased items.
Personalized discounts and promotions also play a key role in keeping customers satisfied amidst price increases. Offering tailored discounts based on individual preferences or purchase history creates a sense of exclusivity and helps customers feel like they are getting a deal, even if menu prices are higher. This allows you to combat the impact of tariffs while keeping your customers loyal.
To counter rising costs from tariffs, AI-driven inventory management offers a powerful solution. Predictive algorithms can analyze demand patterns, allowing you to order the right amount of stock at the right time. This reduces the risk of overstocking or shortages—both of which increase operational costs and erode margins.
Minimizing food waste is another critical strategy. Best practices include portion control, using ingredients creatively, and optimizing shelf life. For example, you can repurpose surplus ingredients into new menu items or implement a first-in, first-out system to ensure older stock is used before it spoils.
Real-time sales data is also essential for inventory efficiency. By monitoring sales trends, you can adjust orders and pricing quickly. If certain items are underperforming due to tariff-related price increases, you can pivot to more cost-effective alternatives. Staying agile and data-driven helps protect profitability in a volatile pricing environment.
As global trade dynamics shift, it’s crucial for businesses to anticipate how tariffs may continue to evolve in the coming years. Understanding these potential changes helps you plan and adjust your strategy to stay ahead of any new challenges.
As tariffs continue to shape the economic landscape, government policy changes are poised to directly impact U.S. consumer inflation. Higher tariffs on imports, especially food and raw materials, will almost certainly result in increased costs for consumers. These price increases are likely to lead to higher inflation, especially in industries heavily reliant on imported goods.
Following the tariffs introduced in April 2025, other sectors may face price hikes in the near future. Pharmaceuticals, currently exempt, could soon be subjected to tariffs, along with semiconductors. For c-stores, this could mean higher costs for over-the-counter medications, health products, and essential technologies like POS systems.
Looking ahead, the long-term economic forecast suggests that food and beverage pricing will remain volatile. Adaptability and strategic planning will be key to navigating this shifting environment.
To prepare for potential tariff changes, restaurants and c-stores should prioritize proactive financial planning and cost forecasting. This allows you to anticipate how tariff increases might impact their margins and make adjustments before changes take effect.
Closely monitor ongoing tariff negotiations and trade policies to stay informed about upcoming shifts and adjust your strategies accordingly. Adopt flexible pricing strategies, such as dynamic pricing or bundling, to remain competitive despite rising costs. You can also engage your customers through loyalty programs and targeted promotions to encourage customer retention and boost sales.
As tariffs on imported goods continue to shape global trade, businesses, especially in the restaurant and c-store industries, are grappling with how these policies affect pricing, supply chains, and profitability. Below, we answer some common questions about tariffs and their wider impact on the economy.
Yes, tariffs contribute to inflation by increasing the cost of imported goods, which in turn raises the prices of products for consumers. When businesses face higher costs for raw materials or ingredients due to tariffs, they often pass those costs onto customers through higher prices.
This leads to inflationary pressure, especially in industries that rely heavily on imports, such as food and retail sectors. Consumers feel the impact through higher prices on everyday items, from groceries to restaurant meals.
Tariffs have both positive and negative effects. On the positive side, they protect domestic industries from foreign competition by making imported goods more expensive, potentially boosting local production. Tariffs also serve as a tool for political leverage in trade negotiations.
However, the cons include higher prices for consumers, disrupted supply chains, and strained international relations. Businesses that rely on imported materials face increased operational costs, which either erode profit margins or result in price hikes that alienate customers.
Countries with high tariffs include India, Brazil, China, and others that are involved in trade protectionism or seek to support their domestic industries. The United States also has high tariffs on imports, particularly under the Trump administration's trade policies. High tariffs create challenges for businesses that depend on sourcing goods from abroad, as they increase the cost of production and reduce the competitiveness of imported products.
The United States' main export is machinery and equipment, which includes items like computers, electrical machinery, and industrial machines. Additionally, the U.S. is a major exporter of aircraft, vehicles, and mineral fuels.
Agricultural products like soybeans, corn, and meat also play a significant role in U.S. exports, particularly to countries in Asia. These exports are crucial to the U.S. economy, supporting jobs in manufacturing, agriculture, and other key sectors.
As tariffs continue to shape the economic landscape in 2025 and beyond, restaurants and c-stores must remain agile. Adapting to fluctuating trade policies means rethinking everything from your supply chain to your pricing and customer engagement strategies.
By tracking inflation trends, negotiating smarter supplier contracts, and leveraging loyalty programs, you can weather rising costs and protect your bottom line.
Request a demo today to discover how Paytronix can be an integral part of your strategy to stay competitive, boost customer loyalty, and navigate the evolving impact of tariffs with confidence.