By Heather Haddon

Restaurants are along for the ride as U.S. stock futures head sharply lower, pressured by fears that expanded tariffs will erode restaurants' margins.

-- Starbucks, a huge coffee importer, fell nearly 3% in premarket trading, while rival Dutch Bros dropped around 5%.

-- Chipotle Mexican Grill, which imports avocados from Mexico, Colombia and other nations, declined 3.5%.

-- KFC owner Yum Brands was down 2% and Burger King parent Restaurant Brands International fell 1%.

U.S. restaurant chains tend to import equipment and packaging from China, and many buy potatoes from Canada and meat from various global sources.

Tariffs are expected to hurt independent restaurants more than chains, which largely source their goods from the U.S. and have more sophisticated supplier networks, said Baird analysts. Import-reliant Starbucks could face steeper challenges without workarounds, the firm said.

The National Restaurant Association said restaurants could push up prices due to higher food and packaging costs. It planned to help operators of all sizes with advice from supply chain experts as to how to cope with the tariffs.

"It's simply not possible for U.S. farmers and ranchers to produce the volumes needed to support consumer demand," the trade group said.

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April 03, 2025 08:02 ET (12:02 GMT)

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