For a year now, retailers have been telling consumers that tariff costs are temporary, that supply chain adjustments will absorb the blow, and that prices will stabilize. A new KPMG survey says that story is over.

The consulting firm's 2026 Tariff Survey, based on interviews with 300 U.S.-based C-suite executives at companies with over $1 billion in annual revenue, found that 55% of businesses plan to raise prices by up to 15% within the next six months. And the data beneath that headline is even more striking: the share of companies passing on more than half of tariff costs to consumers has risen to 34%, more than doubling from 13% in May 2025.

The burden has shifted, and it's not going back.

Beyond Tariffs: The Quiet Price Creep

The most telling data point isn't about tariff passthrough — it's about what's happening beyond tariffed products. According to the survey, 37% of respondents said they've increased prices beyond tariff-impacted products, up from 22% in September 2025. Another 19% said they've raised prices beyond the actual tariff cost itself, nearly double the 10% who said the same last fall.

In plain terms: tariffs gave retailers a permission structure to raise prices, and a significant minority are using that cover to inflate prices on products that were never tariffed in the first place.

This is the dynamic that consumer advocates and class-action attorneys have been pointing to. As we reported in our coverage of the tariff refund lawsuits, shoppers are already suing Costco, Lululemon, and FedEx for their share of the $166 billion tariff refund — arguing that consumers bore the cost of tariffs that businesses are now getting back, with no plans to pass refunds downstream.

The Margin Squeeze Is Real

It's worth acknowledging the other side: retailers aren't raising prices because they enjoy it. The KPMG survey found that margins have genuinely declined. Forty percent of respondents said they've adjusted prices for the full cost of tariffs, down slightly from 44% in the September 2025 survey — suggesting that some companies tried to eat the costs and couldn't sustain it.

The Section 232 tariff expansion we covered last week, which imposed a tiered 25–50% duty structure on steel, aluminum, and copper derivatives, added another layer of cost pressure that's hitting store fixtures, shelving, refrigeration equipment, and packaging materials across the industry.

For retailers operating on thin margins — grocery, dollar stores, off-price — the math genuinely doesn't work without passing through some cost. The question is how much, and whether the passthrough is proportional to the actual tariff impact.

What Consumers See vs. What's Actually Happening

The consumer experience of all this is simpler and less nuanced: everything costs more, and it feels like nobody is absorbing anything anymore.

Newsweek reported that the KPMG findings landed as consumer sentiment sits near historic lows and household budgets are already strained by elevated gas prices and healthcare costs. The timing of another round of price increases — heading into summer, when families are booking vacations and stocking up for back-to-school — could accelerate the trade-down behavior that's already benefiting dollar stores, Walmart, and private-label brands.

For retailers planning their second-half strategies, the KPMG data presents a paradox: raising prices is necessary to protect margins, but doing it aggressively risks accelerating the traffic declines that make margins irrelevant. The retailers who navigate this best will be the ones who raise prices surgically — protecting value-perception on the items consumers track mentally (eggs, milk, paper towels) while taking margin on categories where price sensitivity is lower.

The tariff era was supposed to be temporary. A year in, it's starting to look permanent — and the consumer is the one holding the bill.