TPSS Member-Owners and Shoppers,
One of the many advantages of owning your own grocery store is access to information that other consumers don’t have. I wanted to talk a little about one of the biggest topics in the industry at the moment: tariffs and the cost of groceries. The tariffs and trade instability initiated by the Trump administration are having devastating effects across all industries, but none as high profile as groceries. Consumers have already dealt with a 10-years’ worth of “food at home” inflation since 2022. However, hidden in those real cost increases have also been price gouging and opportunistic profiteering among many large companies.
A first and important thing to understand is that food and agricultural goods imported from Mexico and Canada are exempt from the tariffs under the USMCA trade agreement. That crucially means that products like avocados, berries, and tomatoes that are frequently grown in Mexico are not being charged any additional tariff. I compared invoices from today to those from early January and confirmed our avocado, banana and tomato costs have remained consistent. So it’s important to understand that if you are seeing cost increases at other grocery retailers on those types of products, you should question their validity.
There are real areas where cost increases from the tariffs will make their way onto grocery shelves. Packaging, much of which comes from China, will increase costs for packaged goods companies. At a recent trade show, a large dairy company explained that while their cows were domestic, their cow feed came from Canada and was subject to tariff. What these hidden costs mean is rather than seeing an immediate 25% increase on bananas that would shock consumers, these policies will lead to smaller increases in the coming months. Some yogurt goes up 8% two months from now from those cow feed increases, or a small brewery raising prices in six months when they’ve run through their current supply of aluminum cans.
While we use our voice and our national partners to advocate for the end of tariffs that are a needless tax on our own consumers, we need to stay vigilant against bad actors using the cover of those policies to raise prices. Luckily the co-op has a variety of pre-existing practices that help. The co-op has a fair margin pricing strategy in each department. When other retailers dramatically increased the prices of eggs in recent months due to scarcity, TPSS kept our margins consistent on eggs, and purchased from natural and organic vendors that used practices which kept their flocks healthier.
The Co-op purchases from over 200 local vendors in every department in the store. These vendors are small businesses with no corporate earnings calls. During the pandemic, pricing on our certified organic chicken from Locust Point and Farmer Focus held their prices steady while Purdue and Tyson dramatically increased theirs. We work with these vendors who have a history of doing the right thing and treating their people and products better. We also purchase from other cooperatives like Lancaster Farm Fresh and Frontier.
Recent consumer reports articles have highlighted bad practices among retail grocery giants like Kroger. They were cited for routinely overcharging customers at the register despite listing sale prices on items. These issues are caused in part by chain store cutting back their human workforce, leading to sales tags being weeks out of date. Even more insidious, these large chains are leveraging their customer loyalty data to create income streams and even charge different prices to different consumers. The co-op intentionally uses proprietary systems for our online shopping and we will never sell your data to third parties.
Consumers exercising their collective power is going to continue to be important. Target and Whole Foods and Kroger have to be more scared of losing customers than they are of the actions of the administration. Only we have the power to withhold our dollars from companies caught engaging in unethical practices. Only we have the power to support those doing things responsibly.
-Mike Houston
TPSS General Manager