How the 2024 U.S. Election Could Impact the Grocery Industry: What a Trump Win or Harris Win Means for Retail

Looking at what a Donald Trump win or Kamala Harris win means for retail in the upcoming election, we see starkly different visions for the grocery industry. These differences will directly impact everything from grocery prices to supply chains and consumer products. Both Trump and Harris have discussed approaches to inflation, trade, and the role of grocery stores in the economy, each presenting challenges and opportunities for retailers and CPG (consumer packaged goods) companies.

Trump’s Vision:

• Tariff Policy: Trump has proposed imposing broad tariffs on imports, which could impact the price of goods that grocery stores rely on, including certain fresh foods and ingredients. By aiming to reduce dependency on foreign imports, Trump hopes to bolster U.S. manufacturing, yet these tariffs may lead to higher costs that are likely to be passed on to consumers.

• Deregulation and Domestic Production: Trump has indicated that his administration would reduce regulatory burdens on energy production, which he argues would lower fuel and transport costs for grocery supply chains. This deregulation approach also extends to agricultural innovation, where Trump aims to ease biotech approval processes, supporting a more efficient food production system.

Harris’s Vision:

• Price Gouging Controls: Harris has highlighted the need to regulate “price gouging” by grocery chains, seeking to protect consumers from inflated grocery prices. She attributes some recent price hikes to corporate practices rather than solely inflation, with the proposed federal cap aimed at reducing consumer costs.

• Support for Biofuels and Rural Infrastructure: Building on initiatives from the Inflation Reduction Act, Harris promotes biofuel use, which could impact rural economies by increasing demand for corn and soybeans. Her plans also include substantial investments in rural infrastructure, potentially benefiting grocery logistics in underserved areas.

• Focus on Food Security: Harris also supports expanding access to affordable food through federal assistance programs, which could lead to increased foot traffic and sales for grocery stores, particularly those in lower-income areas.

Implications for CPG Products and Direct-to-Consumer Brand

• Trump: If elected, Trump’s tariffs could increase production costs for CPG companies reliant on imported ingredients. However, his push for reduced regulations may streamline innovation, particularly in biotech sectors, allowing CPG companies to bring new products to market more rapidly.

• Harris: CPG companies could face tighter regulations under Harris’s price-gouging initiatives, pushing them to justify pricing strategies. Companies focusing on sustainability might benefit from her support for bio-based products and renewable energy, aligning with consumer trends favoring environmentally conscious brands.

Preparation for Grocery Stores and CPG Companies

1. Monitoring Regulatory Changes: Both grocery stores and CPG companies should prepare for regulatory shifts. Under Trump, this may involve adapting to trade policy changes and assessing costs associated with tariffs. Under Harris, companies may need to adjust pricing structures to comply with potential new regulations on pricing transparency.

2. Investing in Domestic Sourcing: With Trump’s protectionist approach, brands may consider bolstering domestic supply chains to avoid potential tariff impacts. This strategy could stabilize costs and align with consumer interests in supporting local products.

3. Sustainability Focus: With Harris’s focus on sustainability, companies should be prepared to align with environmentally friendly initiatives, particularly in energy use and packaging. Engaging in programs that support rural economies, such as biofuels, may offer further market advantages.

Concluding Remarks

The approaches of Trump and Harris reflect distinct ideologies that are both rooted in a vision to improve the nation from their perspectives. Their differing plans present unique benefits and challenges for the grocery industry, underscoring the importance of adaptability in retail strategies. As grocery chains and CPG brands navigate these political landscapes, they must stay informed and responsive to ensure sustained success in the face of evolving consumer needs and regulatory expectations. Partnering with experts like Innovar Agency can help your store stay competitive in today’s digital-first world.

Key Takeaways:

• Trump’s Tariff Policy: Potentially higher costs for groceries due to import tariffs, but reduced regulations could streamline food production and innovation.

• Harris’s Price Gouging Controls: Proposed federal cap on grocery prices to combat inflation and corporate price hikes, benefiting consumers.

• Support for Biofuels & Rural Infrastructure: Harris’s focus on biofuels and rural infrastructure could enhance grocery logistics and rural economies.

• Impact on CPG Products: Trump’s tariffs may increase production costs, while Harris’s regulations could challenge pricing strategies but benefit sustainable brands.

• Preparation for Change: Grocery stores and CPG companies should monitor regulatory shifts, invest in domestic sourcing, and align with sustainability efforts to stay competitive.