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What to expect from tariffs and how to deal with them

By May 3, 2025No Comments

Appell Pie

May 2025

What to expect from tariffs

Tariffs can have several important effects on the restaurant industry, depending on which goods are impacted. Here’s a breakdown:

  1. Increased Food Costs
  • If tariffs are placed on imported food products (like seafood, beef, produce, or specialty items such as olive oil or wine), restaurants must pay more for these ingredients.
  • Higher ingredient costs often lead to menu price increases, which can discourage price-sensitive customers.
  1. Supply Chain Disruptions
  • Tariffs can complicate sourcing, especially for restaurants that rely on specific international goods (e.g., Italian cheeses, French wines, Mexican avocados).
  • This could force restaurants to find new suppliers, adjust menus, or face occasional ingredient shortages.
  1. Reduced Profit Margins
  • Independent restaurants, which often operate on thin profit margins (3–5%), may struggle more than large chains to absorb new costs.
  • Some businesses may choose to cut costs elsewhere (reducing staff, trimming marketing budgets, etc.) to stay profitable.
  1. Menu Changes and Innovation
  • Some restaurants respond by adapting menus to focus more on locally sourced or tariff-free ingredients.
  • This can lead to more “farm-to-table” concepts and greater use of domestic suppliers, potentially creating new culinary trends.
  1. Impact on Equipment and Supplies
  • Tariffs aren’t limited to food. If kitchen equipment, furniture, or packaging materials from countries like China are taxed, restaurants could face higher startup and maintenance costs.
  1. Customer Behavior Changes
  • If tariffs lead to broader inflation and higher living costs, customers might dine out less often or spend less per visit.
  • Budget-conscious dining options, promotions, and loyalty programs become even more important to attract customers.

 

What you should do to offset the effects of the tariffs

Experts agree that there are some steps can be taken;

  • Reduce the items on your menu, especially those with ingredients that are imported.
  • Use locally grown produce and protein when available
  • Create seasonal menus using available products
  • Advertise, advertise, advertise
  • Create special events promotions
  • Listen to your customers ideas by creating suggestion cards for each table or create a suggestion landing page on your website.
  • Speak with experts who have proven methods of creating traffic in restaurants. Like the Birthday Club that promotes birthday celebrations at your restaurant jointhebirthdayclub.com
  • Increase catering and delivery options

Use a third party buying service like Strategic Supply Chain Partners to reduce costs. www.ssc.partners.com

  • Make your customers feel special with loyalty programs and going out of the normal to create a welcoming atmosphere.

 

Maybe the most important thing to remember is that these tariff conditions are not long lasting so keep your head in the important aspects of running your business.  Be flexible, be involved and be patient. Mom always told me that the only constant in life is change and she was right.

In short:
Tariffs can raise costs, create supply chain issues, and pressure profit margins — but they can also force innovation and a shift to local sourcing. The level of impact depends on how dependent a restaurant is on imported goods and how flexible it can be in adjusting its operations.

Want to read more great articles you can use? visit www.trnusa.com or www.trnusa.com/blog