In a bold move that reflects growing retailer resistance to supplier-driven inflation, Albertsons Companies, one of the largest supermarket chains in the United States, has issued a firm warning to its suppliers: tariff-related cost increases will not be accepted as justification for price hikes.
The supermarket giant has told vendors that it will not absorb any increases passed on due to international tariffs, particularly those impacting goods from China and other countries where ongoing trade tensions continue to escalate. Sources close to Albertsons’ procurement teams confirmed that the company has “no appetite” to pass these increases onto consumers during a time of fragile economic recovery and increased competition from discounters.
Holding the Line on Prices
With inflationary pressure easing across some sectors and consumer sensitivity to food prices remaining high, Albertsons appears to be taking a hardline stance to protect its margins and maintain customer loyalty. The company has reportedly sent out communications to suppliers clarifying that they must seek cost-neutral solutions—whether by changing sources, reformulating products, or absorbing costs internally.
Retail analysts say this reflects a wider trend among American grocers, many of whom are under increasing pressure to differentiate on price in a crowded market. “The message is clear,” said one US-based sourcing consultant. “Retailers like Albertsons are saying: if you can’t manage your costs, we will find someone who can.”
Impact on International Trade
This development could have a chilling effect on certain categories heavily reliant on imports, such as canned foods, plastic-packaged goods, electronics-adjacent products, and some frozen items. Suppliers facing additional duties are now caught between rising costs on one hand and retailers’ resistance on the other.
Suppliers who spoke off the record said they were frustrated but not surprised. “It’s getting harder and harder to negotiate anything above low single-digit increases,” said one long-time supplier to Albertsons. “Even when shipping or customs costs go up, retailers are asking us to find efficiencies elsewhere or risk delisting.”
A Broader Retail Shift
The Albertsons decision echoes similar statements from other major US retailers, including Walmart and Kroger, both of whom have pushed back on price increases they deem “avoidable”. Many are now relying more on private label or alternative suppliers to keep their offering competitive.
Albertsons operates more than 2,200 stores across the US under banners such as Safeway, Vons, Jewel-Osco, and Shaw’s. The company’s purchasing power makes it a formidable negotiator, particularly as it seeks to recover from the controversy surrounding its proposed merger with Kroger—recently blocked by the FTC on antitrust grounds.
Outlook
With the threat of new tariffs continuing and geopolitical tensions rising, suppliers are facing a new normal: where traditional price justification is no longer enough. Albertsons’ firm position could set the tone for retailer-supplier dynamics in 2025 and beyond.