When Costco’s CEO addressed what tariffs mean to the retailer in its latest earnings call, he distinguished Costco from other online retailers, who are raising prices in the face of higher costs. Consumers, meanwhile, have already taken notice of rising prices online and shared how their shopping habits have shifted in a new survey.
The May survey, which Bizrate Insights conducted and Digital Commerce 360 commissioned, asked 1,024 online shoppers to characterize their recent experiences. The responses included whether or not they perceive tariffs to be driving up prices, as well as how their behaviors have changed when comparing options and searching for alternatives.
What tariffs mean for prices to consumers
Most notably, the overwhelming majority of consumers surveyed said tariffs have meant higher prices for products they frequently purchase. 35.8% of online shoppers categorized those price increases as significant. Meanwhile, 41.7% said changes were moderate.
Those who had not seen price changes they believed to be related to tariffs were in the minority, with just 15.4% saying they had noticed any impact.
These survey responses echo new data from the New York Federal Reserve. The New York Fed’s own May survey of businesses in New York and Northern New Jersey found that about 77% of service firms whose costs increased because of higher U.S. tariffs had already passed some of their costs along to customers in the form of higher prices. That response was the same from about 75% of manufacturers.
Moreover, 45% of service firms, along with 31% of manufacturers, indicated they were passing all of their new tariff-related costs on to clients. The survey responses came from businesses that reported an increase in the cost of their imported goods owing to tariffs over the most recent six-month period.
How consumers say their habits are changing
These increased prices appear to have real consequences for retailers where consumers shop. More than 20% of survey participants said they had either chosen to buy lower-priced alternatives, bought fewer items or purchased products less often after encountering higher prices recently. These decisions applied to products that they considered to be frequent buys prior to new tariffs.
In addition, 56.5% said they thought retailers should absorb new tariff costs, rather than passing them on to their customers. That expectation falls at odds with how things are actually playing out, according to the New York Fed report. However, some of the largest online retailers in the U.S., including Mass Merchants such as Costco, Walmart and Target, have all said that they are making efforts to avoid price increases, even though hikes at Walmart and Target have reportedly already been spotted.
Full results from the Digital Commerce 360 and Bizrate Insights tariffs survey from May can be accessed by subscribers. Also included are full results with charts showing how online shoppers responded.
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