Why these companies are lowering prices despite rising inflation and looming tariffs

Inflation is heating up, a trade war is brewing and American consumers aren’t feeling great about the economy. That’s a toxic mix for businesses.

Inflation is heating up, a trade war is brewing and American consumers aren’t feeling great about the economy. That’s a toxic mix for businesses. Inflation rose last month to its highest level since June, topping 3%. Prices at the grocery store remain elevated, with eggs rising 15.2% in a single month, according to January’s Consumer Price Index. Earlier this month, Walmart — widely considered to be a bellwether for the US economy — forecasted slower sales growth for this year. Meanwhile, President Donald Trump’s trade war with China, Canada and Mexico could cost American families $1,200 more per year, according to the Peterson Institute. And while many businesses are planning to pass those costs on to consumers, some are hoping their decision not to will make them stand out. As consumers tighten their purse strings, they will become more discerning and competition for their spending will only grow, experts say. Brands will have to stand out. Some companies are now banking on a strategy they say is both good for business and their customers: lower prices. “There’s never a bad time to lower the price, especially when consumers have been incredibly price sensitive, and will continue to be. I think we’re going to see more brands move along these lines,” said Diana Smith, associate director of client advisor, retail and eCommerce at Mintel, a market research firm. And price is often what makes the difference. More than 65% of adults say price is the most important factor when choosing where to shop, according to a February survey of more than 2,000 adults, conducted by Mintel.