Impact on Retail Spaces and Grocery Anchors
- Higher Costs for Supermarkets:
- – 63% of vegetables and 47% of fruits and nuts in the U.S. are imported from Mexico, leading to potential price surges of up to 25% on items like tomatoes, peppers, and berries (Supermarket News).
- – Over 80% of avocados consumed in the U.S. come from Mexico, making them vulnerable to price increases (Food & Wine).
- – Canada, a major supplier of cherry tomatoes and frozen French fries, faces 25% tariffs, leading to higher consumer prices (WSJ).
- Meat and Dairy Supply Chain Disruptions:
- – The U.S. imports 34% of its meat from Canada, making meat products likely to see significant price hikes (WSJ).
- – Rising wholesale meat prices will force grocery stores to pass costs onto consumers, potentially reducing foot traffic in shopping centers (Food & Wine).
Inflationary Pressures on Real Estate
- Higher Inflation Forecast:
- – Tariffs could increase the Federal Reserve’s inflation measure from 2.6% to over 3.2% annually (WSJ).
- – Higher inflation means increased operating expenses for landlords, including property taxes, utilities, and maintenance, which could lead to rent hikes for tenants.
- Supply Chain Bottlenecks and Delays:
- – Border delays due to tariff regulations may disrupt inventory levels, delaying store openings and retail construction (Supermarket News).
- – Tariffs have slowed trade routes, with trucks lining up at the U.S.-Mexico and U.S.-Canada borders, leading to delayed shipments of perishable food items (WSJ).
Changing Consumer Behavior and Retail Foot Traffic
- Stockpiling and Shortages:
- – Consumers anticipating price hikes may start stockpiling essential goods, leading to temporary sales surges but potential long-term spending reductions in other retail categories (Food & Wine).
- Retailer Struggles with Inventory:
- – Disruptions in supply chains may cause short-term vacancies and financial strain on retailers, ultimately impacting landlords and property investors (WSJ).
Winners and Losers in Commercial Real Estate
- Winners:
- – Industrial and warehouse spaces supporting domestic food production and distribution may see increased demand as companies shift to localized supply chains (WSJ).
- – Developers focused on last-mile logistics may benefit from restructuring distribution models.
- Losers:
- – Retail landlords, especially those with grocery-anchored shopping centers, may face higher tenant turnover and renegotiations on lease terms due to rising operational costs (Supermarket News).
Strategies for Commercial Real Estate Adaptation
- – Diversifying Tenant Mix: Expanding beyond grocery anchors to experiential and service-based tenants that are less impacted by import costs.
- – Investing in Industrial Spaces: With the shift toward domestic production, warehouse and logistics properties may offer strong returns.
- – Lease Structuring for Inflationary Pressures: Implementing cost-sharing agreements with tenants to manage rising operating expenses.
- – Proactive Communication with Tenants: Keeping retailers informed about economic conditions and exploring cost-sharing solutions to maintain long-term occupancy (Supermarket News).

Final Outlook
- – Rising costs, inflation, and shifting consumer spending habits pose risks and opportunities for real estate investors and retail landlords.
- – Retail landlords must rethink leasing strategies and tenant partnerships to adapt to a transformed market (WSJ).
- – Industrial and logistics spaces may thrive, while retail landlords with grocery anchors may struggle with cost-related tenant issues.
Sources
- – Supermarket News: “Trump Tariffs Could Mean Empty Shelves at the Grocery Store”
- – WSJ: “Trump’s 25% Tariff Deadline is Near. Here Are 8 Ways You’ll Feel the Pinch if They Kick In.”
- – Food & Wine: “Trump Tariffs on Food Could Make Your Grocery Bill Much Higher”