With the announcement (and subsequent delay) of the 25% tariffs announced by the Trump administration and the retaliatory tariffs placed on a list of US imports by the Canadian government, Canadians are going through a range of emotions and many Canadians are looking to control what they can by "voting with their wallets" and choosing to buy more products that are Made In Canada.
This could have significant impacts on the Retail and CPG industries as many of the items on the counter tariff list were Consumer Packaged Goods that seemed to target the powerful US CPG companies that might be able to bend the ear of the Trump administration.
Here at Field Agent Canada, we wanted to get a read on the potential impacts for Retail and CPG. Between February 2nd and 4th, we surveyed 1083 Canadians and they told us about how the tariff threat would impact their shopping for Grocery, HABA and Alcoholic Beverage items.
The numbers are quite remarkable with 80% or more saying that they would start checking labels to see where items were made and significant numbers saying they would be much more purposeful about buying Canadian products or alternative products produced in other countries other than the US (think buying French wine instead of California wine).
In fact, only about 15% of respondents told us that they would continue to buy their favourite brands regardless of the tariffs - that's very bad news for companies selling US manufactured or grown products.
Other non-retail actions that Canadians are considering include 29% saying they would cancel US streaming services such as Netflix; 65% saying they would only consider non-US brands of automobiles; and 68% saying that they would not even visit the United States for upcoming vacations.
There is also potential blowback for US retailers and foodservice chains with significant proportions of respondents indicating that they would not shop at specific US retailers and / or restaurants. For example, 28% said they would no longer shop at Amazon and 40% said they would not eat at US-based restaurant chains.
The potential for upheaval in our industry is significant. Supply chains will need to adjust as velocities on US products slow and Canadian products pick up speed. US retailers will need to communicate to Canadians how they support Canadian manufacturing and suppliers and support Canadians through hundreds of thousands of jobs. Brands that are not clearly communicating on-pack where their products are made will likely be assumed by consumers to be American, whether that is true or not.
Canadians are rallying in ways that they have not done in literally generations. Standing up for what is right is as Canadian as beavers and maple syrup and this may be something that unites us all in a way that many of us have never seen.
However, we need to find a balance - an "all or nothing" approach to US products will have impacts on the hundreds of thousands of Canadians that rely on US companies to support their families. There is no clear "right" or "wrong", but it will be fascinating to see how this inflexion point affects the Canadian retail, packaged goods and foodservice industries in the weeks and months to come.
