BCG on Consumer reposted this
Shishir Agarwal, Philipp Carlsson-Szlezak, Iacob Koch-Weser, Todd Bishop, and Aaron Wilson led a great session yesterday with retail clients, breaking down the ripple effects of recent tariff actions and the strategic responses we’re seeing from those adapting fastest. Some key insights discussed in the session: • 80% of U.S. consumers are worried about how tariffs will impact their personal finances—creating potential pullback in discretionary categories, especially for price-sensitive consumer segments • Trade-down behavior is likely to accelerate across formats and categories as consumers seek greater value • Without action, retailers face margin compression on both sides—rising input costs and potentially shrinking basket sizes • Capital investment could see a slowdown as indirect suppliers work through their own rising costs and delayed timelines As tariffs reshape consumer behavior, supplier dynamics, and investment plans, retailers must act now to develop scenario-based plans, build new capabilities, and start taking no regrets actions. Here are four levers to stay ahead in an increasingly volatile environment.