Measuring the tariff effect
Most Canadians believe tariffs will have negative short- and long-term impacts on the economy and continue to affect their grocery spending, according to a new study by NielsenIQ (NIQ).
The North America Tariff Sentiment Study: U.S./Canada Topline found 76% of Canadians expect tariffs will have a negative impact on the economy this year and 72% expect they will have a negative impact over the next three years.
Not surprisingly, 85% of Canadians disapprove of tariffs while only 6% favour them and 9% are unsure.
The study was the third of four NIQ fielded this year to gauge Canadian and U.S. consumer sentiment around tariffs. In Canada, 5,002 English and French speaking consumers were surveyed between Aug. 1 and 11. Mike Ljubicic, managing director of NIQ Canada, says tariffs are just one of the factors, along with inflation, increased commodity prices and economic uncertainty, that are putting pressure on consumers’ wallets.
The study found Canadians are most concerned about the impact tariffs have on the prices of fresh produce (49%), followed by poultry (40%) and dairy and eggs (both at 39%). Ljubicic says many cash-strapped consumers who oppose the U.S. tariffs would like to buy Canadian at the grocery store, but have to opt for lower-priced American goods. “They have to make a decision based on how much money they have in their wallets.”
That, he says, helps explain why the percentage of Canadians who said they would avoid buying U.S. products due to the tariffs has dropped from 36% at the beginning of the year to 29% in the latest survey.
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The NIQ study also found 42% of Canadians say they are not eating out as much and 32% have reduced travel, partly due to the U.S. tariffs.
“People are just a little nervous about the future” and are being more frugal, Ljubicic says.
Consumers are controlling their spending by sticking to essentials and cutting back on discretionary spending, buying on promotion, shifting to private label and shopping at discounters, he says.
Even households with incomes above $70,000 are being prudent. “They’re the ones that are driving the growth in the discount sector,” by shopping at “hard discounters” such as No Frills, FreshCo and Food Basics.
Ljubicic does not expect a bounce back from discounters to conventional grocers for the foreseeable future. “I think discount is a new norm that’s here to stay,” he says. “We will continue to see expansion and conversion into those types of outlets because that’s where the traffic is going.”
This article was first published in Canadian Grocer’s November 2025 issue.
