The cost of tariffs on the hospitality industry and how a GPO can help

The 2025 federal policy changes pose a potential disruption to the hospitality industry.

New tariffs threaten to create significant supply chain disruptions and operational challenges. Imagine a restaurant chain forced to abandon a signature dish due to import cost surges. This isn’t just a hypothetical scenario; it illustrates the potential impact of the evolving policy landscape.

The main question is how you’ll adapt. And how can your business safeguard margins while maintaining customer satisfaction when these tariffs occur?

Tariffs and supply chain disruptions: Beyond price hikes

Tariffs on imported items — alcohol, food, machinery, gas — aren't just cost increases; they have the potential to cause significant shifts throughout the supply chain. Large hospitality businesses, reliant on long-term contracts and global sourcing, can face complex challenges adapting to these changes.

Proposed tariffs on goods from countries like Mexico, Canada and China could have a negative impact on American businesses. Tariffs increase the cost of goods brought into the country, which can lead to inflated prices for businesses and consumers.

Other possible negative effects could be:

• Limited ingredient availability: Suppliers may shift sourcing, causing shortages of certain products.
• Brand perception risks: Changes to menus or offerings resulting from price increases could weaken the guest experience.
• Higher prices on domestic goods: Even domestic producers may raise prices due to increased costs of raw materials or reduced competition from imports, or to take advantage of the market.
• Supply chain disruptions: Changes in trade policies can disrupt established supply chains, causing delays, shortages and increased logistical challenges.

Navigating tariff turbulence: Strategies for profitability

Entegra is committed to helping businesses navigate tariff risks and maintain profitability through proactive strategies. These include:

• Diversifying suppliers: Select from a broad range of suppliers from Entegra’s Local and Direct Savings Program.
• Predictive analytics: Analyze spending, maximize savings and get forecasting and inventory support with Entegra PurchasingIQ.
• Culinary insights: Offer high-profit dishes that use local ingredients and work with Entegra Culinary Consulting for more profit-driven menu ideas.
• Offset higher prices: Get up to 30%* savings on food, flatware, uniforms and more from dozens of other categories.
• Accessing expert advice: Get insights into supply chain issues, menuing and more from Entegra advisors.

Resilience in the face of change

Adapting purchasing, diversifying supply chains and leveraging partnerships are essential for navigating the evolving landscape. Businesses that prioritize planning and maintain flexibility will be best positioned for success.

Prepare your business for the changes ahead. Download "Keeping customers satisfied: Helping you navigate 2025 Federal policy changes" and start preparing for what's next.

Have questions? Contact us to learn more.

^{*Savings based when compared to supplier list prices.
The information in this blog post reflects Entegra's understanding of the tariff situation as of March 10, 2025. Tariff policies are subject to change, and the actual impacts may vary. Businesses should consult with their government affairs and legal counsel teams for the most up-to-date information and guidance.}