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NEW YORK (BLOOMBERG) – The growing threat of a globalized global trade war forces Americans to have to shell out more money at lunchtime.
Fire station subscribers are likely to raise prices for 10-cent sandwiches ($ 0.14 in Singapore) because of take-away tariffs from China.
The cost is magnified by the fact that about 60% of the company's orders are to take away or to deliver, according to Mr. Don Fox, president and CEO of the chain of 1,100 stores.
"It's an essential element for us," Fox said in an interview. "It may not sound like much, but it adds up quickly."
Across the industry, tariffs are causing another headache for chains already struggling with higher wages, a labor shortage and inflated pork prices. an outbreak of African swine fever.
Imminent levies on commodity imports such as avocados and tomatoes, part of the Trump administration 's promise to punish Mexico for immigration, could rise to 875. millions of US dollars (1,195 million Singapore dollars), according to an estimate by At. Kearney.
This will probably be pbaded on to consumers in the form of price increases.
Like Firehouse, Chipotle Mexican Grill Inc. uses sugar cane pulp called bagbade for its burrito bowls and children's meal wrappers. China is a major supplier of this material, but tariffs have forced the company to 2,500 stores to diversify its supply chain earlier this year in order to reduce its costs. She is now receiving bagbade from Taiwan and is also looking for supplies in other Asian countries.
However, tomatoes and avocados are harder to crack. Mexico's geographic proximity and longer growing season have made it a key supplier for these products in the United States. According to Hbad Avocado Board data, Mexican lawyers accounted for 78% of the US market last year.
The southern neighbor of the United States also exports large quantities of cucumbers, berries, peppers, coffee, beef and other food products.
Chipotle estimates that Mexican tariffs, if adopted, could cost them US $ 15 million this year. The chain of burritos would consider lowering menu prices by "about a penny on a burrito," according to a statement by CFO Jack Hartung.
Higher prices could also be on the menu at Wendy's Co. and Subway restaurants, which get vegetables from Mastronardi Produce, a Canadian greenhouse that produces tomatoes, peppers and cucumbers in Mexico.
"Everyone will eventually charge the rates," said Paul Mastronardi, president of the Kingsville, Ontario-based company, which also grows berries inside.
Customs duties on strawberries and other berries imported from Mexico would be approximately US $ 493 million. Kearney's data show.
Asked about tariffs on Mexican products, Wendy's said she was watching the situation. Subway did not immediately respond to a request for comment.
The Firehouse Subs company based in Jacksonville, Florida, which is mostly franchisees, buys tomatoes and lettuce from Mexico, depending on the time of year.
It will be difficult to find alternatives and there is no choice but to continue ordering the items as they are scattered throughout the menu.
The fire station is also predicting that pork prices will climb to 25% later this summer because of the fever that kills pigs in China, as well as the high cost of chicken and beef, Fox said .
"There are various debates and discussions about who actually pays the price," said Fox.
"Let's face it, in the end it's the consumer."
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