Albertsons Warns Suppliers Against Tariff-Related Price Hikes, Cites Competitive Pricing

Albertsons Companies, the second-largest grocery chain in the US, has warned its suppliers that it will not accept tariff-related price hikes due to President Trump's tariff policies. The company operates over 2,200 stores across the country and has informed suppliers that they are not permitted to include tariff-related costs in invoices without prior authorization. The move aims to keep products at competitive prices.

Albertsons Companies, the second-largest grocery chain in the United States, has warned its suppliers that it will not accept tariff-related price hikes due to President Trump's sweeping tariff policies. The company operates over 2,200 stores across the country and has informed suppliers that they are not permitted to include tariff-related costs in invoices without prior authorization. This move aims to keep products at competitive prices.

In a letter sent last month, Albertsons Companies stated, "With few exceptions, we are not accepting cost increases due to tariffs" [1]. The Idaho-based chain operates 20 well-known banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw's, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen, Carrs, Kings Food Markets, and Balducci's Food Lovers Market. The supermarket giant made $80.4 billion in sales during the fiscal year 2024.

The decision to refuse tariff-related price hikes comes amidst growing concerns about the impact of Trump's tariffs on the supply chain and grocery prices. Fox Business previously reported that grocery retailers are operating on razor-thin profit margins, often ranging from 1% to 5% [1]. Such businesses may be inclined to pass costs to retain profit margins.

In recent weeks, Trump imposed a baseline tariff rate of 10% on imported goods from nearly every major U.S. trading partner in an effort to support American-made goods and curb drug flow into the country. As a result, imported produce such as avocados, alcohol, coffee, and seafood are expected to become more expensive for the American consumer.

Several major U.S. retailers, including Walmart and Target, recently met with Trump to discuss the impact of tariff policies on the supply chain. Retailers are facing challenges of slowing business and declining stock prices, with Trump's tariff policies seen as a major reason [2]. Although retail sales saw growth in March, businesses are concerned about the uncertainty of future tariffs, which is affecting inventory and pricing strategies.

Walmart has stated that it is diversifying its supply chain and striving to maintain low prices, with about two-thirds of its goods sourced in the United States. Target did not indicate how many of its goods are sourced overseas but previously stated that price increases due to tariffs would vary by category.

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References:
[1] https://www.foxbusiness.com/retail/grocery-giant-warns-its-suppliers-company-wont-accepting-tariff-related-price-hikes
[2] https://longportapp.com/en/news/236856343