American consumers are facing a new wave of pricing pressure as companies from food giants to hardware chains warn that tariffs are already making their way onto store shelves.
Retailers like Walmart (WMT), Target (TGT), and Best Buy (BBY) have all said in recent weeks that some tariff-related increases are starting to creep into the cost of groceries, home goods, and electronics.
Just this week, packaged food giant J.M. Smucker (SJM), home to such brands as Folgers, Dunkin’, and Café Bustelo, warned of more price hikes after US coffee profits plunged 22% under tariffs.
Hormel Foods (HRL), the company behind Spam and Skippy, also flagged “the steep rise in commodity input costs” after missing earnings expectations in the quarter. Its stock fell 12% after the warning.
Adding to the uncertainty, a federal appeals court late Friday struck down most of President Trump’s global import tariffs, ruling the executive orders exceeded his legal authority.
The 7–4 decision allows the tariffs to remain in place while the administration appeals to the US Supreme Court — keeping both retailers and consumers in limbo over the future cost of imported goods.
“You can’t control the controllables right now,” Mickey Drexler, former Gap (GAP) CEO and current chair of fashion brand Alex Mill, told Yahoo Finance prior to the latest tariff development. “You don’t know what the cost of your goods are relative to retailing and margin. … I think we haven’t seen the worst of it at all.”
Executives cautioned that more increases are coming as fresh inventory rolls in at higher costs.
“We’re keeping our prices as low as we can for as long as we can,” Walmart CEO Doug McMillon said last week. “As we replenish inventory at post-tariff price levels, we’ve continued to see our costs increase each week, which we expect will continue into the third and fourth quarters.”
Read more: What Trump’s tariffs mean for the economy and your wallet
That mounting pressure is forcing retailers of all sizes to decide how much of the burden they can absorb — and how much inevitably gets passed along to an increasingly bifurcated consumer.
“You just have this K-shaped economy,” Tom Essaye, founder of Sevens Report Research, told Yahoo Finance on Friday. “You have the higher income spenders that are really keeping the economy going, and then the lower income spenders that are getting squeezed because they are feeling the impact of tariffs of inflation.”
On Friday, the University of Michigan’s consumer sentiment survey showed that sentiment in August fell nearly 6% from July and more than 14% from a year ago. Inflation expectations for the next year rose to 4.8% from 4.5%, while buying conditions for durable goods dropped to their lowest in a year.
