Updated April 10, 2025 at 11:36 AM ET
If you shop for groceries in New York, New Jersey, or Connecticut, you're likely familiar with Stew Leonard's. The supermarket chain calls itself the "world's largest dairy store," featuring costumed characters in the aisles, a few petting zoos and even animatronics with dancing vegetables to entertain customers.
Like every other U.S. grocery store, Stew Leonard's is grappling with major challenges in the shifting market, especially as tariffs continue to impact prices and supply chains. While tariffs on most countries have been paused for 90 days, those on China remain in place, increasing the strain on more inventory and driving up costs.
As Stew Leonard Jr., CEO of Stew Leonard's, describes it, "If I talk to some of the customers, their comment is 'short-term pain, long-term gain.' Then I meet another group who think Trump's just crazy. But overall, I think customer sentiment in the store is that they feel the pressure from food prices, but they're still buying."
But some products are keeping Leonard up at night. "The big item I worry about down there are basically avocados and tequila, because you can't buy them anywhere else in the world," he said. "California does have some avocados too, but not enough to supply the needs that you have."
Morning Edition host Michel Martin spoke with Leonard about the effect of these tariffs, and their impact on his grocery chain which relies on both small farmers and international suppliers. He also explained how his company works with suppliers to absorb some of the price hikes.
This interview has been edited for length and clarity.
Interview highlights
Michel Martin: There are thousands of items in any grocery store. Can you give us a sense of what percentage of what's on your shelves is subject to tariffs?
Stew Leonard Jr.: Right now, we're mainly focused on wine and spirits because those are subject to tariffs. And a lot of those importers that bring these products in are small businesses. So the food part of it, all of the salmon, we get a million pounds of salmon from Canada every year, but that's since it's a fresh product is not tariffed right now, and then Mexico, the big item I worry about down there are basically avocados and tequila, because you can't buy them anywhere else in the world. California does have some avocados too, but not enough to supply the needs that you have. We get New Zealand lamb, we got Easter coming up, you know, we're working, and these are small farmers that we deal with.
Martin: What are those conversations like? Have you had to raise prices? Have the suppliers raised prices?
Leonard: I'm on the phone, sometimes twice a day with, with a lot of our farmers and ranchers. Basically, they're feeling just overall financial pressure at their farms right now. They're getting a little relief. Some of the corn feed prices are down, some of the fuel costs are down, so that helps them out. But you know, if they get hit with a 10 or 20% tariff — these are families, they're just like everybody listening. They don't run these big companies. So usually what we did when we did it during COVID was, when we needed a product and they told us that the prices had gone up, we usually worked it out where we split it with them, so Stu Leonard's eats half of it, and they eat half of it. Most of them are happy with that.
Martin: Have you seen any cost increases so far? Have these tariffs forced you to raise prices on anything in particular?
Leonard: Well, the good news is all just about all our suppliers are doing a wait and see right now in the food business. I know we're like a bull right now in the food industry as far as inflation and so forth, but you know what? Right now, you need volume in the food business. We don't want to see sales go down if we raise prices, sales go down, unless you're Gucci or Prada or something.
Martin: Let's go back to what's keeping you up at night. You mentioned avocados, tequila, and lamb. Some might say, "Well, tequila is not essential, and avocados maybe are, maybe not. So, if people stop buying them, is that really a big deal if the long-term goal is to shift the economy to benefit American businesses?"
Leonard: I would say just about every product you can buy from Europe, and we don't buy much from China, and this is only affecting less than 5% of our business right now. So we're mainly fresh and perishable, but you can buy a lot of these products in the U.S. Brie cheese, for instance, a beautiful 70% or full cream you get from France. The same family that has moved over to Wisconsin is producing brie, and it's $2 a pound less.
Martin: So, even though these tariffs are nerve-wracking in the short term, are you saying they might not be so harmful in the long run?
Leonard: That's right. When I talk to customers in the store, some say, "short-term pain, long-term gain." Others think Trump is just crazy, but overall, I feel the sentiment in the store is positive. People are feeling the pressure of rising food costs, but they're still buying. Maybe it's because they're not going out to restaurants as much. Sales are brisk, and I don't see any negative attitudes from our customers.
Martin: Before we go, do your employees have retirement accounts through the company? How are they doing?
Leonard: I have one lady who was planning to retire in June, but she just called to say she's decided to put that off a little longer. We've been telling our team members at Stew Leonard's to hang in there.
This interview was produced for radio by Milton Guevara.
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