A Deeper Dive
How tariffs will affect restaurant equipment costs
May 7, 2025
Neal Sherman, the founder of TagX Brands, shares insights into how rising tariffs are reshaping the restaurant equipment industry. With tariffs hitting an average of 27%, restaurants are forced to consider used equipment as a cost-effective alternative. Sherman discusses the increasing demand for his company's offerings amid economic uncertainty, shedding light on the challenges like labor shortages and shifts in consumer preferences towards budget-friendly dining. His expertise brings clarity to navigating this evolving landscape.
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Quick takeaways
- The increase in tariffs is expected to raise restaurant equipment costs significantly, pushing operators towards the used equipment market for savings.
- Consumer sentiment and inflation are influencing dining choices, potentially leading to decreased patronage and slower sales for restaurants.
Deep dives
Impact of Tariffs on the Restaurant Industry
Recent tariff increases on imported goods are expected to significantly affect the restaurant industry, with estimates showing costs could reach as high as $12 billion for tariffs on imports from Canada and Mexico alone. While many restaurants source food domestically, the tariff impact is primarily seen in equipment costs, as much of the restaurant equipment is either imported or contains imported components. As a result, restaurants will likely feel the pinch of increased equipment prices, potentially leading to higher operational costs. However, this situation may also encourage some operators to turn to the used equipment market to mitigate expenses.
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