The Tariff "Grinch"? New Data Suggests Tariffs Will Bring Higher Prices, Lower Margins, and Less Gifts This Holiday Season

Almost half (49%) of suppliers plan to increase prices due to tariffs, business buyers and consumers respond by evolving sourcing and shopping strategies

FOSTER CITY, Calif., June 25, 2025 /PRNewswire/ -- Coupa, the leading AI-native total spend management platform, today released new research providing a comprehensive view of tariff impacts on businesses and consumers. Economic and geopolitical volatility, near-constant fluctuation, and general uncertainty has driven increased concern from businesses and consumers alike. Coupa's research revealed that 88% of consumers believe that an increase in costs will be passed down to them as new tariffs are implemented. In addition, almost one-third (29%) of suppliers globally believe tariffs are the greatest external threat to profits in 2025.

Holiday Coal in the Stockings: Buyers & Suppliers Brace for Potential Consumer Impacts
Suppliers are no stranger to disruption in the supply chain, but recent unpredictability has ushered in new threats to profit margins, especially as suppliers prepare for the holiday season. Almost half (42%) of U.S.-based suppliers believe that tariffs will be the greatest threat to their business for the upcoming holidays and a majority (69%) anticipate a decline in revenue this year because of tariffs. Globally, suppliers also cite threats from competitors undercutting prices (24%) or raw materials shortages (14%) as the greatest threats to their businesses.

For the upcoming holiday season, toys and games (60%) and consumer electronics (50%) were top industries that identified tariffs as the largest threat to their business. The looming concern rings true on the buyer side as well, with more than half (55%) expecting recent trade policies to cause a negative impact on their bottom line in 2025.

As suppliers strategize to best protect their margins and certain industries scramble to lessen the impact on the peak of the holiday season, nearly half (49%) report plans to increase prices, and 46% are already increasing inventory and stockpiling. Looking again at popular holiday categories, 70% of toys and games suppliers say they will increase prices, while 30% of electronics suppliers plan to increase onshoring.

The good news for consumers: none of the suppliers surveyed plan to increase prices by more than 20%. The bad news: the majority (56%) are planning for a 5-10% price increase, meaning average household budgets would need to adjust by at least $300 a month–on the low end–which in combination with a decrease in non-essential consumer spending will likely result in less gifts this holiday season. 

"Amidst the uncertainty of new and increasing tariffs, businesses that fail to swiftly adapt risk losing their competitive edge and will experience impact to their bottom-line. Now is the time for businesses to embrace AI and leverage technology and scenario modeling to fortify supply chain resiliency and safeguard profitability," said Nari Viswanathan, Senior Director, Supply Chain Strategy at Coupa. "Coupa AI empowers businesses to anticipate cost increases, gain deeper visibility into spend, and make the right business trade-offs – including optimizing operations and improving inventory management."

Sourcing Shake-Up: Buyers Pivot to Nearshore Options Amidst Global Challenges
Global economic pressures are causing sourcing to be under a microscope now, as well. Coupa's research finds that 75% of buyers have increased or plan to increase nearshoring and 61% have increased or plan to increase onshoring. While 56% have increased or plan to increase offshoring, businesses are moving away from sourcing from China (36%), followed closely by the U.S. (29%), and Germany (23%) in response to predicted tariffs. Suppliers with proven quality and reliability (60%), stable and competitive pricing (57%), and full compliance with regulations (42%) topped the list for buyer preferences.

"Diversification becomes a crucial strategy for businesses as global uncertainty around trade mounts. While taking clear steps to prepare for potential tariff impacts is important, there is also a huge opportunity to drive long-term success by enhancing supplier resiliency and collaboration," said Prashanth Ravishankar, SVP Coupa Advantage and Supplier Strategy. "Leveraging a vast, dynamic buyer-supplier network, such as Coupa's, enables companies to quickly pivot to different scenarios, whether it's sourcing new suppliers, negotiating contract terms, or optimizing their network."

Cost-Conscious Consumers Lead the Way
In the U.S., the majority (84%) of consumers cite cost over quality and variety as the most important factor when shopping. With concerns also growing over the rising cost of living (36%) and trade policies threatening to increase the cost of goods (24%), more than half of consumers (54%) say they have looked for deals or discounts on necessities, 53% have decreased spending on non-essential items, and 67% have adjusted where they spend for better cost options. Those consumers who are cutting back on non-essential spending have cut costs by dining out less (68%) or by swapping brand-name items for generics (52%). As consumers become more aware of how they can lessen the impact of tariffs on their wallets, businesses should note that non-essential spending is becoming less of a priority for consumers.

To learn more about Coupa's AI-native total spend management platform, visit coupa.com. 

Methodology
This research consisted of three separate surveys. The first survey was conducted among 400 managers and above responsible for procurement, sourcing, inventory, and pricing within organizations providing goods or services to other businesses or organizations (suppliers) with an annual revenue of $250M+ in the U.K., U.S., France, and Germany. The research was conducted by Censuswide in March 2025.

The second survey was conducted among 400 managers and above with decision-making responsibility across procurement, sourcing, and inventory in organizations making purchases with suppliers with the goal of reselling or using their own operations/products (buyers) with an annual revenue of $250M+ in the U.K., U.S., France, and Germany. The research was conducted by Sapio Research in April 2025. 

The third survey was conducted among 1,000 U.S.-based consumers over 18 years of age in April 2025 via Dynata.

About Coupa
Coupa is the leading AI platform for total spend management. Using its trusted, community-generated, $8 trillion dataset, Coupa brings autonomous AI agents, a network of 10M+ buyers and suppliers, and leading apps together on one unified platform to seamlessly automate the buying process and connect to customers in a whole new way. With Coupa, you'll make margins multiply™. Learn more at coupa.com and follow us on LinkedIn and X (Twitter).

SOURCE Coupa Software