As global seafood suppliers grapple with the potential impacts of threatened tariffs on grocery and restaurant sales, overarching consumer concerns are likely to end up having a greater impact on U.S. shopper spending.
“People focus on whether the tariff is 25 percent or 15 percent, but I think the bigger question is whether this is going to pull back a consumer that has been really strong for a very long time, and the same thing for business confidence,” Circana Executive Vice President Perimeter Practice Leader Chris DuBois told SeafoodSource at the Circana Growth Summit, which ran from 7 to 9 April in Orlando, Florida. “If you see big prices moving in the store, hold on.”
When prices began rising in 2022, consumers pulled back their spending, and if prices shift again that trend could reignite.
“If we see higher food prices in the food store again, I think you’re going to see the consumer pull back in a really big way,” DuBois said.
While declining to comment on the impact of specific tariffs – particularly since they are in flux nearly daily – DuBois acknowledged that they could “do a number” on some seafood species, while there will be substitutes for others.
“No one knows how much was in deep cold storage and for how long, so it’s hard to project gloominess and monster numbers because so much is unknown,” DuBois said.
If tariffs on seafood go into effect, seafood volume could be challenged this year, DuBois said.
“There were a lot of light seafood buyers that were out of the market for the last couple of years, so what you’re left with is some of the core buyers that would buy it to some degree anyway,” he said. “[However], if you see a major increase in price for farmed salmon, for example, because of tariffs from overseas, then that’s a big deal.”
Core seafood buyers will continue to buy the seafood they typically buy if the price goes up by a couple extra dollars per pound, but if they are having to pay a couple extra dollars for every single item in the basket, there will be a pullback, DuBois said.
Consumers are already very concerned about the economy, he said, and the data shows it. The University of Michigan's Consumer Sentiment Index, which measures how U.S. consumers feel about the economy, personal finances, and business and buying conditions, fell to 64.7 in February, a decline of 9.8 percent from January and a 15.9 percent decrease from February 2024.
Additionally, 55 percent of consumers are “extremely concerned,” about food cost inflation, Circana found, while 63 percent of lower income consumers are extremely concerned, Circana Senior Vice President Consumer & Shopper Insights Adam Mellott said.
Affordability of food and groceries is the number one concern of U.S. households, followed by the affordability of everyday non-food essentials.
Because overall food prices continue to outpace wage growth, consumers are pulling back, Mellott said, maybe switching to a smaller size – or buying bulk for longer term items – to save money, and in some cases consumers are switching products altogether.
Shoppers are gravitating toward private label, Mellott said, with private label brands now holding a 23-percent share of consumer packaged goods (CPG) food sales.
And more shoppers are looking to dollar stores, club stores, e-commerce, and other outlets to help them save money on groceries.
“It is a difficult macro environment. They [shoppers] tell us they are stressed [and] worse off financially than they were 12 months ago,” Dollar General Senior Vice President of Decision Science and Analysis said at the Circana Growth Summit.
As a result, Dollar General, which operates around 20,000 stores in the U.S. and sells a variety of food items including seafood, is performing very well.
“Price and value are central to what we know we can deliver,” Snow said, noting that the company’s stores also fit the convenience bill.
Dollar General stores are located in many rural areas, where shoppers don’t have any other grocery store options nearby, and the stores are easy to get in and out of because they are smaller footprint stores, according to Snow.
“For the low income consumer working multiple jobs, time is of the essence,” he said.
At the same time, Americans are not just shopping at dollar and value stores such as Aldi. The average U.S. household shops across 39 unique retailers and foodservice outlets annually, according to new Circana data, and omnichannel shoppers spend nearly twice as much as brick-and-mortar or e-commerce shoppers.
As consumers get squeezed financially, “everyday indulgences” play a key role in consumer spending, with notable growth in small luxury purchases such as gourmet coffee, Circana said. And convenience-driven meal preparation – often incorporating air fryer usage – is growing.
"Our study shines a light on the trade-offs consumers face daily, whether it’s choosing value at dollar stores or splurging on small indulgences like gourmet coffee," Circana Executive Vice President of Consumer and Shopper Insights Michelle Bennett said in a press release.
