Raphael Stevens

Fast casual restaurants are seeing a boost in customers using loyalty programs through shifting economic behaviors.
Flexibility, personalization, and surprise rewards are becoming central to how brands design loyalty programs.
Brands are expanding beyond simple perks into strategic tools for engagement to see long-term growth in the future.

A customer exits a Cava restaurant in New York City on June 22, 2023.
Brendan McDermid | Reuters

As some consumers pull back on spending amid economic uncertainty, fast-casual restaurant chains are leaning on rewards programs to pull them back in.
Loyalty programs, which offer discounts or added perks for returning customers, have transitioned from being a nice bonus for restaurants to a must-have. As cost-cautious diners prioritize value, brands like Chipotle, Starbucks, Cava and others are utilizing rewards to keep customers coming back and building habits that go beyond the occasional coupon.

“In tough times, loyalty programs become more essential,” said Peter Fader, a marketing professor at the Wharton School at the University of Pennsylvania. “They become a required ingredient to building and maintaining relationships.”
In the 12 months ended in May, the restaurant industry only saw monthly traffic increase once, in November, according to Black Box Intelligence data. As diners visit restaurants less frequently, sales struggle. Only 43% of restaurant brands tracked by Black Box reported same-store sales growth in May.
Consumers who join loyalty programs visit restaurants more frequently, making 22% more visits per year to eateries, according to Circana data. They also frequent the brands that they belong to at twice the rate of nonmembers, the market research firm found.
Coffee giant Starbucks reported 34.2 million active rewards members in its second quarter and said more than 59% of its U.S. company-owned transactions came from those members. Potbelly has seen similar success: In the first quarter of 2025, over 42% of its total shop sales came from digital business, which includes the loyalty program users.
Chipotle has over 20 million active rewards members. It’s loyalty program makes up approximately 30% of sales on average each day and helped the burrito chain to avoid major price hikes, according to the company.

“We have really strong brand loyalty among our members,” Nicole West, Chipotle’s vice president of digital experiences, told CNBC. “We’re really focused on engaging with our members and doing that in a way that really resonates with them.”
Driving loyalty is critical for the likes of Chipotle and Starbucks. In the first quarter, Chipotle posted a same-store sales decline for the first time since 2020 and said it saw a “slowdown” in consumer spending. Meanwhile, Starbucks’ same-store sales have fallen for five straight quarters.
Cava is bucking industry trends with strong sales growth, but faces Wall Street pressure to maintain its rapid expansion.

Getting creative

As rewards programs pick up steam, more brands are getting creative and moving beyond the value meal.
Cava revamped its rewards program in October 2024 to give customers more flexibility in how they earn and use points. Members can earn points each visit and redeem them for specific items like pita chips or full entrees. The program also includes limited-time offers and in-app challenges. In late March, the company celebrated National Pita Day by rolling out a mascot named “Peter Chip” and offering members complimentary pita chips.
“Guests like to see periodic surprises and delight moments where we can reward them with pita chips or other brand offerings,” Andrew Rebhun, Cava’s chief marketing officer, said
The Cava Rewards program now has more than 7 million members. A new tiered system is expected to launch soon, according to Rebhun.

Customers order food at a Chipotle Mexican Grill restaurant on April 26, 2023 in Austin, Texas.
Brandon Bell | Getty Images News | Getty Images

Chipotle this year launched a seasonal campaign called “Summer of Extras.” The campaign is giving away over $1 million in free burritos, encouraging customers to rack up visits and compete to become the top Chipotle visitor in their state.
“We continue to see activations in this program build and excitement and positive reaction across social media from our fans,” West said. “We just continue to focus on delivering value to them in ways through programs where customers are given opportunities to ‘plus up’ their points or earn specific offers by exhibiting specific behaviors.”
Salad chain Sweetgreen also retooled its loyalty program this spring, moving away from its tiered subscription program that many consumers found confusing.
“In a challenging industry environment where consumers are making more intentional choices with every dollar, SG Rewards is designed to meet the moment by delivering a meaningful value,” Sweetgreen co-founder and CEO Jonathan Neman said on the company’s quarterly conference call in May.
Even Starbucks, an established leader in rewards programs, has made changes. In June, the coffee chain ended its 25-star reusable cup bonus and replaced it with double stars across the full purchase. While the change was controversial among loyalists, who claimed the earning potential was reduced, the coffee chain said participation has remained steady.
Of course, giving free rewards comes with tradeoffs. Promotions cut into profits in an industry that faces tight margins in the best of times. Restaurant chains hope those freebies drive longer-term loyalty and spending on full-price items.
Long-term wins
Brands navigating economic pressure are seeing that loyalty programs are helping to drive visits.
Potbelly revamped its loyalty system in early 2024, moving to a coin-based structure that allows customers to redeem rewards faster and across more items. Customers now have access to over 14 menu items through the rewards program. This flexibility has led to more frequent visits, Potbelly’s chief marketing officer, David Daniels, said.
“We saw a lift almost immediately in terms of engagement,” Daniels said. “The response has been incredibly positive.”
Chicago-style eatery Portillo’s joined the loyalty game in March with “Portillo’s Perks.” Instead of using a traditional app, the program utilizes a digital wallet system and focuses on frequency. It tracks how often a customer visits and awards badges as they go.
“It gives flexibility to change how the program is deployed,” Garrett Kern, Portillo’s vice president of strategy and culinary, said to CNBC. “It doesn’t require a redesign and relaunch to an application. It was a great way for us to get the program out there in a branded and easy-to-use way.”
The company is aiming for 1.5 million to 1.7 million sign-ups by mid-summer.
— CNBC’s Amelia Lucas and Jacob Pramuk contributed to this report. More

The Summer Fancy Foods Show, hosted by the Specialty Foods Association, returned to the Jacob K. Javits Convention Center in New York.
More than 2,000 exhibitors showed off a range of specialty food and drinks, offering attendees a glimpse at the products headed for grocery aisles and restaurants in the near future.
The trade show has also traditionally been a springboard for new brands seeking to expand their reach.

Condiments are getting an upgrade. Chefs are taking their signature sauces and dips outside the kitchen. And “swicy” still reigns.
Those food trends were all on display at the Specialty Food Association’s Summer Fancy Food Show, which returned to the Javits Center in New York this week.

From Sunday to Tuesday, more than 2,000 exhibitors showed off a range of specialty food and drinks, offering attendees a glimpse at the products headed for grocery aisles and restaurants in the near future.
“It’s always been the show where people go to see the trends,” said Christine Couvelier, a culinary trend spotter and founder of the Culinary Concierge.
Couvelier, a seasoned show attendee, guided CNBC through three floors of booths, highlighting the trends — and winners — on her radar.
Past show trends that are now making their way to mainstream consumers’ palettes include new uses for vinegar, oil-based hot sauce and lavender as a flavor. But not all trends have that kind of staying power.
“I think I’ve seen six booths that have Dubai chocolate. We won’t see Dubai chocolate next year,” Couvelier said, referring to the chocolate bars filled with kadayif and pistachio that have taken over TikTok, grocery stores and even Shake Shacks nationwide.

The trade show has also traditionally been a springboard for new brands seeking to expand their reach. Honest Tea, Ben & Jerry’s and Tate’s Bake Shop are among the companies that attended the show in their early days on their way to becoming well-known consumer brands.
Here are some highlights from this year’s Summer Fancy Food Show:

New takes on olive oil

Castillo de Canena shows off its olive oils at the Summer Fancy Food Show
CNBC | Amelia Lucas

Home cooks in the U.S. have been using olive oil for several decades. In recent years, olive oil has branched out, with more focus on the flavor that it offers, whether it’s drizzled on top of ice cream or used in cakes.
But the cooking staple is now getting an upgrade, thanks to infusions of trendy flavors. For example, Castillo de Canena, a family-owned Spanish company, has been making olive oil for centuries, but its booth highlighted two newer additions to its line: harissa olive oil and olive oil finished in sherry casks.

Mustard’s moment

Caplansky’s Delicatessen shows off its small-batch mustard line.
CNBC | Amelia Lucas

Olive oil isn’t the only pantry staple getting a makeover. The mustard category could be heading for a shakeup, thanks to a few new entrants hoping to enliven the tired condiment.
Pop Mustards pitches itself as the “caviar of mustards” because it uses whole mustard seeds, giving the condiment a new texture. The company also uses fermentation, smoking, brining and other methods to bring more flavor out of the seeds.
Caplansky’s Delicatessen showed off a more traditional take on the condiment at its booth, inspired by classic deli mustards. But its product lineup offers more flavor than the classic yellow mustard or dijon found in fridges today.

Plant-based 2.0

Umyum displayed its cashew-based cheese and vegan butter.
CNBC | Amelia Lucas

Since Beyond Meat’s meteoric rise, plant-based purveyors have displayed their vegetarian substitutes at the Summer Fancy Food Show. But as the category struggles, the number of booths hawking plant-based products dwindled this year.
Still, the category hasn’t disappeared altogether. Instead, exhibitors presented their products by leading with their taste, rather than their vegan or vegetarian bona fides.
For example, Umyum displayed its cashew-based cheese and butter substitutes, with packaging that reads, “Our craft just happens to be plantbased.”

Chef-led brands

Chef Michael Solomonov is selling his hummus through his brand Zahav Foods.
CNBC | Amelia Lucas

During the pandemic, many restaurant chefs pivoted to selling at-home versions of their beloved sauces, condiments and other foods that can be easily canned or packaged. Even after eateries reopened their dining rooms, some chefs have stuck with it.
“This is a longer lasting trend, and it’s the passion around making the best version of that food that there is, and now the chef wants you to have it at home,” Couvelier said.
At this year’s show, exhibitors included Zahav Foods, the packaged food brand of chef Michael Solomonov, known for his restaurants Zahav in Philadelphia and Laser Wolf in New York. The mustard brand Caplansky’s Delicatessen is also the brainchild of chef Zane Caplansky.

The age of swicy

Slawsa’s display of its sweet and spicy cabbage-based relishes
CNBC | Amelia Lucas

“Swicy” food and drinks have already taken over grocery aisles and restaurant menus, but exhibitors were promoting the next evolution of the flavor trend, a portmanteau of sweet and spicy.
Mike’s Hot Honey, which helped bring back the “sweet heat” trend, showed off its collaboration with Heluva Good for a swicy dip. Smash Kitchen displayed its Hot Honey Ketchup, adding a little heat to the sweetness of the classic condiment. And Slawsa — a portmanteau of coleslaw and salsa — exhibited its sweet and spicy cabbage-based relishes.

Beef tallow

Beefy’s Own cooks its potato chips in beef tallow.
CNBC | Amelia Lucas

Over the last year, beef tallow has been having a moment, thanks to Health and Human Services Secretary Robert F. Kennedy Jr. and his “Make America Healthy Again” agenda. Kennedy has touted the rendered fat as a healthier alternative to “seed oils,” although nutrition experts broadly disagree.
Two newcomers displayed their beef tallow products at the Summer Fancy Food Show: Butcher Ben’s Beef Tallow and Beefy’s Own, which cooks its potato chips in beef tallow. More

Expanding Opportunity

Bookings for queer-friendly housing accommodations in the U.S. on the LGBTQ+ travel platform misterb&b saw a 66% decline among Canadian users and a 32% decline among European users from February to April compared with the same period in 2024.
The majority of users said they use their travel budget as a form of activism — supporting inclusive destinations and economies.
Despite some pullbacks in corporate sponsorships, pride organizations across the U.S. said attendance is still strong.

Participants march in the Reclaim Pride Coalition’s seventh annual Queer Liberation March in New York, June 29, 2025.
Erik McGregor | Lightrocket | Getty Images

Canadian citizen Robert Sharp was planning to visit Provincetown, Massachusetts — one of the most LGBTQ+-friendly places in America — for his friend’s milestone birthday in July.
But against a backdrop of ongoing trade tensions sparked by President Donald Trump’s tariff policies and increasing anti-LGBTQ+ rhetoric and policies in the U.S., he said his plans changed.

“Do we want to have that stress before going on vacation? Or do we want to support our own country?” Sharp said.
The group he was planning to travel with decided to cancel the trip and will instead visit Montreal, he said.
Sharp and his partner were also planning to visit Chicago or Fort Lauderdale, Florida, for a separate trip this year, but they shifted their plans to a Canadian road trip between Calgary and Vancouver.
“We’ve been hit hard in Canada with tariffs and there’s been a real sense of patriotism up here. So, we ultimately decided to explore our own country, and do a road trip to the Rockies and spend money within Canada to help our economy,” Sharp said.
Sharp’s change in plans reflects a larger trend of international travelers rethinking where they are spending their travel budgets and pulling back on visits to the U.S.

The number of foreign visitors to the U.S. by air dropped 10% in March from a year prior, according to the International Trade Administration, part of the Commerce Department. Including land border crossings, inbound visitors to the U.S. fell 14% in March from the same period last year, according to the industry group.
Oxford Economics estimates spending among international visitors to the U.S. will fall $8.5 billion this year, as negative perceptions of the U.S. tied to trade and immigration policy lead travelers to other destinations.
Among the LGBTQ+ population, bookings for queer-friendly housing accommodations in the U.S. on the LGBTQ+ travel platform misterb&b saw a 66% decline among Canadian users and a 32% decline among European users from February to April, compared with the same period last year.
The company said it had a 22% increase in bookings in blue states and a 9% decline in red states during that time period. It also saw declines in cities within red states including Salt Lake City, Phoenix, and Austin, Texas.
Misterb&b CEO Matthieu Jost said overall bookings on the platform are not down globally but are increasing. Jost said LGBTQ+ individuals appear to be continuing to spend on vacations, but they’re changing their destinations.
The company said the majority of misterb&b users it surveyed this year said they use their travel budget as a form of activism — supporting inclusive destinations and economies.

Participants including GLIDE President Gina Fromer, center, ride in the 2025 San Francisco Pride Parade in San Francisco, June 29, 2025.
Arun Nevader | Getty Images Entertainment | Getty Images

The rainbow dollar

Sharp, who owns LGBTQ-friendly travel company Out Adventures, is not alone in changing his travel plans.
In February, the LGBTQ+ advocacy group Egale Canada issued a statement saying its members would not participate in person at conferences or events happening in the U.S. this year, including WorldPride, which took place at the beginning of June in Washington, D.C.
The decision was made primarily to protect individuals’ safety, said Helen Kennedy, executive director of Egale Canada.
In his second term, Trump has signed several executive orders targeting transgender people, including preventing them from serving openly in the military and trying to keep transgender athletes out of girls’ and women’s sports.
Another executive order, which says the federal government recognizes only two sexes, male and female, prompted several countries, including Denmark, Finland and Germany, to issue official cautions for LGBTQ+ travelers visiting the U.S., particularly transgender travelers. Canada has also updated its travel guidance with specific advisories for people with an “X” gender listed on their passports.
Kennedy said another reason for the decision not to travel to the U.S. was to push back on what she views as “economic warfare” from the U.S. toward Canada.
“People talk about Canada and the U.S. having a long history of being incredible neighbors. And yes, we do, but that’s based on economic interests a lot of the time,” Kennedy said. “When you put that human element with the economic element, then you think, well, OK, why would I go there?”
Kennedy said members of Egale Canada who are involved in nongovernmental organizations would normally spend anywhere from $3,000 to $5,000 per person during a trip to attend a conference or event. Corporate travelers usually spend at least $5,000, she estimated.
“We do spend a fair chunk of change in hotels,” she said. “We do excursions, we rent bikes, we do all of the things that everybody else does.”
The LGBTQ+ travel market is significant. The purchasing power of LGBTQ+ consumers overall is estimated to be $1.4 trillion, according to a 2022 study by the market research firm Pride Co-Op.
In 2023, the global LGBTQ+ tourism market size was $296.8 billion, and it’s expected to more than double in 10 years, reaching $634.9 billion in 2033, according to Market.US.
Research from Arival Travel shows that LGBTQ+ travelers are more likely to be affluent, with a household income of over $150,000, compared with other travelers.
When traveling, LGBTQ individuals book more activities and tours and spend more on these experiences than other populations, the Arival research found.
John Tanzella, CEO of the International LGBTQ+ Travel Association, said his organization is already sensing a pullback in international LGBTQ+ travel to the U.S. He said he has heard hesitations from international members about attending the organization’s global convention in October in Palm Springs, California.
“They don’t feel welcome here, so why come and spend their money here?” Tanzella said.
“On the surface, it affects airlines and hotels. But if you dig a little deeper it does affect other businesses, whether it’s barber shops or restaurants, bars, spas. A lot of communities rely on tourists to come in and spend their money,” he added.

Pride flags are seen at the Pride on the Pier boat parade, part of the World Pride festival, at the DC Wharf in Washington, June 6, 2025.
Kayla Bartkowski | Getty Images

Pride celebrations carry on

Despite concerns of waning visits from international LGBTQ+ travelers, as well as some pullbacks in corporate sponsorships for Pride celebrations, Pride organizations across the U.S. said attendance was strong at Pride Month events, many of which take place on the last weekend of June.
But many organizations said it’s still too soon to get official attendance numbers or difficult to estimate, given that many Pride celebrations are non-ticketed and open to the public.
Matt Şenız-Cheng, associate director of partnerships for NYC Pride, said attendance for its Pride events last weekend is expected to total 2.5 million — in line with its typical numbers.
He said NYC Pride lost approximately 25% of its corporate sponsorships initially this year, due to the economy, tariffs and pullback surrounding diversity, equity and inclusion. But he estimated the number of people and contingents participating in the Pride march this year will be bigger than in previous years.
Ryan Bos, executive director for the Capital Pride Alliance, which ran WorldPride this year, said organizers were “pleasantly surprised” that people still showed up amid concerns about the Trump administration’s policies.
Bos said he had heard calls to cancel the event this year due to political tensions in Washington, he said.
“If we were to retreat, what message would that have sent to all the other Prides who are also experiencing similar challenges?” Bos said.
While WorldPride doesn’t have official attendance numbers yet, Bos said he believes attendance was strong. However, Tanzella, of the International LGBTQ+ Travel Association, said he heard numbers for WorldPride were down this year.
Cities in red states have also continued on with their pride celebrations.
Attendance rose from about 28,000 last year to 33,000 this year at Phoenix Pride’s annual Rainbows Festival in April, Executive Director Michael Fornelli told CNBC in a statement. Its pride parade will be celebrated in October due to the summer heat.
In Salt Lake City, SLC Pride estimated its celebration last weekend brought in 17,000 attendees, more than the 10,000 it saw last year, according to Bonnie O’Brien, festival director.
“We are in a little bit of a blue bubble here in Salt Lake,” O’Brien said. “We’re not expecting people to come from big, big cities or foreign countries. But will we get people from Wyoming? Yes. Will we get people from rural Utah or rural Idaho? Yes.”
“It’s not about travel. It’s not about red or blue,” she said. “It’s about the closest place that they can find community. And that they know that they’re safe, if just for a weekend.” More

Taxpayers earning $1 million or more are expected to see a boost in after-tax income of about 3% under President Donald Trump’s “big beautiful bill.”
The existing $10,000 cap on SALT deductions will rise to $40,000 for those making less than $500,000, with the income threshold rising 1% a year.
The Senate version of the bill raises the threshold to qualify as a “small business” from $50 million to $75 million.
There are also changes to the estate and gift tax, itemized deductions and charitable deductions.

A view of the US Capitol in Washington, DC, on June 30, 2025.
Jim Watson | Afp | Getty Images

The wealthy will likely see a host of new tax breaks in President Donald Trump’s “big beautiful bill,” along with permanent extensions of many of the 2017 tax cuts, according to tax experts.
Taxpayers earning $1 million or more are expected to see a boost in after-tax income of about 3% in the Senate version of Trump’s bill, according to the Tax Policy Center. That compares with the nationwide average of about 2.5%. In dollar terms, millionaire earners will see an average after-tax income increase of $75,000 in 2026, according to the Tax Policy Center.  

Virtually all the core provisions of the 2017 tax cut are expected to be extended in the final bill, which was passed in the House on Thursday and now heads to Trump’s desk, with some provisions becoming permanent. There are also several new tax breaks or benefits added in the bill that further lower tax bills for those at the top — especially for investors in small businesses.
Here are the five most important changes in the bill that affect high earners and the wealthy.

SALT

Surprisingly, the Senate bill largely follows the House’s version of the state and local tax, or SALT, cap increase. The existing $10,000 cap on SALT deductions will rise to $40,000 for those making less than $500,000, with the income threshold rising 1% a year. Initially the Senate was opposed to a change that largely benefits blue-state top earners. Yet after threats from the House, the Senate agreed to the $40,000 level.
Unlike the original House version of SALT, however, the Senate bill preserves a popular loophole to get around the cap. Dozens of states allow a workaround, called the pass-through entity tax, or PTET, that encourages pass-through owners and partners to avoid the cap at the state level. It benefits everyone from car dealers and dentists to accounting and law partners, but not employees of those firms.

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The initial House version of the bill eliminated the loophole benefit for service industries and most white-collar firms, such as accountants, lawyers and doctors, according to Kyle Pomerleau at the American Enterprise Institute. Yet the Senate didn’t follow the House change.

“The Senate version has no limitation on the workarounds,” Pomerleau said, “effectively allowing these taxpayers to utilize an unlimited SALT deduction.”

Qualified small business stock benefit

Entrepreneurs and investors in small businesses will cheer a change in qualified small business stock, or QSBS. Created during the Clinton administration and expanded under President Barack Obama, the program is designed to encourage investments and creation of small companies. Under current law, investors or owners of a qualifying C Corp for more than five years get reductions in capital gains taxes when they sell. A qualifying company is defined as a “small business” if its total assets are $50 million or less. When a business is sold, owners or investors are exempt from capital gains taxes up to $10 million, or 10 times the original basis of the investment, whichever is greater.
The Senate bill raises the threshold to qualify as a “small business” from $50 million to $75 million. It also increases the exclusion from $10 million to $15 million, and it creates a new, tiered system for allowing tax breaks for those who want to sell before five years.
Justin Miller, partner and national director of wealth planning at Evercore, said the new rules would allow an investor to put $74.9 million into a small business and have up to $749 million exempt from capital gains if it sold for more than 10 times the original basis.
“It’s encouraging wealthy investors in qualified small businesses with enormous potential,” Miller said.

Estate and gift tax

Like the version the House put forward, the Senate bill makes the estate tax permanent, which in Washington means it won’t have a built-in expiration date. The exemption would increase to $15 million per estate or $30 million for couples, and the exemption will be indexed for inflation.
For the ultra-wealthy, the estate tax is the most important of all the major tax code provisions. So having some stability, at least until the next election, will make for calmer estate planning and gifts.

Itemized deductions

The Senate bill includes a limit on the value of itemized deductions that was also included in the original House bill. Only about 10% of Americans — mostly the wealthy — still itemize their taxes, since the standard deduction is now $15,000 for single filers and $30,000 for joint filers. Under both the House and Senate versions, taxpayers in the top bracket will have to subtract 2/37th from the value of each dollar deducted over the threshold. The net effect is that top taxpayers will only get a deduction benefit of 35 cents for every dollar, rather than 37 cents.

Philanthropy

There’s good news and bad news for charitable giving, depending on your income level. For lower- and middle-income earners, the Senate bill includes a provision to encourage more charitable giving by the 90% of Americans who no longer itemize. The 2017 tax cuts doubled the standard deduction, eliminating the incentive for the vast majority of taxpayers to itemize and claim the charitable deduction. The Senate bill allows taxpayers to take the standard deduction and still claim a charitable deduction of up to $1,000 for single filers and $2,000 for married joint filers.
Yet for wealthy donors, who now account for the majority of charitable giving, the Senate bill is decidedly uncharitable. It decreases the value of the charitable deduction for high-income taxpayers by capping itemized deductions and sets a new floor of 0.5% of adjusted gross income for the itemized charitable deduction.
So someone with $1 million in adjusted gross income wouldn’t get a tax break on the first $5,000 of donations. More

Some in the retail industry are relieved that tariffs on Vietnamese imports could be 20% instead of a previously proposed 46%, but the duties are expected to lead to higher prices, which could chill consumer spending.
Vietnam was the retail industry’s backup plan after Trump hiked tariffs on China during his first term, and it’s now the second largest supplier for footwear, apparel and accessories sold into the U.S., according to the American Apparel & Footwear Association.
Trump’s proposed deal with Vietnam is a positive sign that similar frameworks could be announced for other Asian countries facing reciprocal tariffs like Malaysia, Cambodia and Bangladesh.

A worker seals a box containing packed items of clothing inside a warehouse at a Thai Son S.P. Co. garment factory in Binh Thuan province, Ho Chi Minh City, Vietnam, on Thursday, Apr. 10, 2025.
Linh Pham | Bloomberg | Getty Images

The retail industry is breathing a sigh of relief after it appeared to avoid the worst case scenario on Vietnam tariffs.
But some executives believe the tentative trade deal President Donald Trump announced Wednesday is still bad for business and could have a chilling effect on consumer spending. 

“It’s a lot better news than where we were on Liberation Day,” one CEO of a popular consumer brand told CNBC after Trump said tariffs on Vietnamese imports would be 20%, down from the 46% levy he proposed on April 2, then later suspended. The new rate would be double the 10% duty currently in place.
Another executive called the news “bad” but agreed that a 20% tariff was better than the 46% duty Trump originally imposed, however unrealistic the proposed rate was.
“I guess Trump needs ‘positive’ news,” a third executive said. “I think things are going to evolve. Let’s see if this is definitive.” 
Trump’s announcement on Wednesday came only days before the 90-day suspension of the steep tariffs he proposed in April expires next week, and as his administration scrambles to strike agreements with dozens of trading partners. Even so, he did not say when the deal with Vietnam would take effect, or whether both sides have agreed to the tariff rates.
In the months between Trump’s April 2 tariff rollout and his announcement on Wednesday, retail executives in the apparel and footwear industries fretted over the potential that Vietnam imports could face tariffs nearly as high as the cumulative 55% duties for Chinese imports. 

Over the last decade, some of America’s top retailers, including Gap, American Eagle and Nike, have all reduced their reliance on China to shield themselves from both high tariffs and the region’s geopolitical turbulence. 
Many sought refuge in Vietnam, where the factories, some owned by Chinese businesses, are known to produce products at a similar quality and price as China. They also started manufacturing in other countries in southeast Asia, such as Cambodia, Bangladesh and Malaysia. Those countries were facing tariffs of 49%, 37% and 24%, respectively, under Trump’s April plan, but are subject to a 10% duty for now.
Vietnam is now the second largest supplier for footwear, apparel and accessories sold into the U.S. market, according to the industry trade group the American Apparel & Footwear Association. It has become an essential part of the footwear supply chain, on pace to become the largest supplier of shoes to the U.S. in 2025, according to the Footwear Distributors and Retailers of America, another industry trade group.
If Trump’s proposed 46% tariff on Vietnam had taken effect, it would mean much of the industry’s work to leave China would have been for naught. Some companies are relieved the tentative deal would set the levy at 20% and the announcement agreement is also a sign that Cambodia, Malaysia and Bangladesh could reach similar frameworks. 
“Twenty percent is a sigh of relief,” said Sonia Lapinsky, a partner and managing director at AlixPartners who advises fashion brands. “There’s some positivity and some optimism that this is manageable. So at least there’s that. This isn’t business destroying, which is great. However, this does have real implications, right?”
Most companies have plenty of tools to offset the impact of tariffs, such as working with their suppliers to share costs. But to avoid major hits to their profit margins, many including Nike are planning to raise prices. It’s still unclear how those hikes will affect consumer spending because it will take time for the increases to trickle down in the supply chain. 
AlixPartners previously created pricing models for CNBC that examined how the price of Vietnamese-made sweaters and shoes could rise under Trump’s proposed tariffs — if retailers do not pass any of the cost on to suppliers or shoppers. At a 10% levy, the cost of a $95 pair of men’s shoes could rise by $7.42 to $102.42. With a 20% duty in place, the cost increase would be even larger.
Many executives worry any tariff hike of this magnitude will be bad for businesses and consumers. Paul Cosaro, the CEO of Picnic Time, a supplier to top retailers like Target, Kohl’s and Macy’s, said if the clocks were wound back to April and Trump said there’d be a 20% tariff on Vietnamese imports, “no one would’ve been happy.” 
“There could be threats of a 46% tariff and you come back with 20 and it’s going to sound better but… it’s just more money coming out of the consumers’ pockets at the end of the day and they have less money to spend on picnic baskets and coolers and things like that,” said Cosaro, who raised his prices between 11% and 14% earlier this year to offset the cost of China tariffs.
“It’s not good for the consumer. Ultimately, it’s just increasing the prices … I don’t think that’s good news.” More