MW Sending kids back to school with PB&J lunches costs 6% more this year. Here's how tariffs, SNAP cuts factor in.

By Genna Contino

Food prices have been more tariff-sensitive than prices of school supplies and apparel - for now

As tariffs drive retail prices up, parents preparing to send kids back to school could feel the squeeze on their budgets at the grocery store.

As kids prepare to head back to school, experts say parents shopping for backpacks, pencils and other supplies haven't yet experienced the full extent of the tariff-related sticker shock expected to hit retailers in the coming months.

They might, however, notice their kids' packed lunches are more expensive than last year.

Packing a school lunch in 2025 costs $6.15 on average, 3% more than it did at the beginning of the 2024 school year, according to a report from Deloitte's Consumer Industry Center. A peanut butter and jelly sandwich lunch with an apple, baby carrots, cookies and milk is the cheapest type of packed lunch at $4.84 - but it also saw the steepest price increase from last year, 6%, driven by higher retail costs.

In an effort to get ahead of tariff implementation, many businesses stockpiled goods - including school supplies and apparel - to keep consumer prices low for as long as possible, experts say. But many food items are more tariff-sensitive because they're perishable and cannot be easily stockpiled. Because of this, parents might feel the ripple effects of tariffs on their budgets more noticeably when grocery shopping.

"Where you start to see movement first are the things that you can't really stockpile, things that are perishable, things that don't have a really strong domestic supply," said Neil Bradley, executive vice president and chief policy officer at the U.S. Chamber of Commerce. "So if you take an item like bananas: no domestic bananas, incredibly perishable. To the extent that you're giving your kid a banana to take to school, you're already beginning to see those price movements."

See more: Americans more worried about inflation and unemployment after new trade deals leave tariffs at highest level in decades

Cuts to the Supplemental Nutrition Assistance Program, formerly known as food stamps, are exacerbating the financial squeeze in school cafeterias. The One Big Beautiful Bill Act, signed into law by President Donald Trump in July, includes a 20% funding cut through 2034 to the program that provides food benefits to low-income families and free-meal eligibility for kids. These changes could lead to at least 18.3 million students losing access to free meals, the Urban Institute estimates.

Republican lawmakers and the White House have defended SNAP cuts, arguing the changes are necessary to promote work, reduce government spending and ensure resources are serving the "truly needy."

How rising costs from tariffs are making it into your child's lunch box

The U.S. imports many food items, such as meat, fruit and vegetables, which have been tariffed very low historically, according to the Chamber of Commerce. But those low tariff rates have jumped dramatically in the past few months.

For example, the average effective tariff rate on dairy, eggs and honey jumped from 6.12% in 2024 to 11.26% today, while the tariff rate on meat grew from 1.97% to 10.87%, Chamber data show.

See more: Inflation alarm bells went off again and prices are rising. Just how bad is it going to get?

Beyond the classic PB&J lunch, the Deloitte report also broke down the cost of different meals parents might pack for their children.

The price of a Lunchables-style meat, cheese and cracker kit with a fruit cup, pudding and soda can is $5.92, up 2% year over year. A salad with healthy snacks to go with it costs $6.54, up 1% from last year. And a chicken and avocado quesadilla with sides and a juice costs $7.30, up 2% from 2024.

Tariff-related price increases on groceries are extending a period of heightened food inflation. Grocery prices have grown 23% in the past five years, according to Bureau of Labor Statistics data.

Because groceries are a necessity that consumers shop for regularly, they tend to take notice of food inflation more than they do for price increases on other goods, despite food prices rising at a slower pace than overall prices, Bankrate economic analyst Sarah Foster said.

Grocery shopping "probably wouldn't make you feel so poorly about inflation in general if it was just something you could cut out of your budget," Foster noted.

From the archives (March 2025): Why America is obsessed with eggs

Lunch brought from home costs double the price of a school-provided lunch, which averages about $3. However, 42% of parents opt to pack their kids' lunches anyway, citing healthier options, taste and variety among the reasons, according to the Deloitte survey. Kids from higher-income families are more likely to bring lunch from home, the study found.

Price hikes on clothes and school supplies still to come

While parents might have scored some back-to-school deals on items such as backpacks, pencils and new shoes, experts don't expect prices on these items to remain low for long. The average effective tariff rates on these goods have grown to 21.15%, 16.06% and 26.46%, respectively, Chamber of Commerce data show.

See more: Teachers spending big on classroom supplies can look forward to broader tax breaks - but there's a catch

"Indications are that prices in coming quarters may rise sharper, rewarding consumers who preemptively purchased goods," said Michael Clayton, a professor at American University's Kogod School of Business. "This obviously remains a fluid situation, as agreements are still being reached with key trading partners."

While just over a quarter of businesses reported in the Census Bureau's Business Trends and Outlook survey that they raised prices in the two weeks ending Aug. 10, 47% of businesses said they expect to raise prices in the next six months.

Walmart $(WMT)$ Chief Executive Doug McMillan confirmed that such price hikes are on the horizon during a call with analysts Thursday, after the retailer released its earnings report for the second quarter of 2026.

See more: Walmart says tariffs are raising costs, but it's trying to avoid price increases - for now

SNAP cuts exacerbate financial woes for low-income families

The growing cost of school lunches is an added financial burden for an already strained consumer. A Bankrate report published in June found that less than half of Americans have enough emergency savings to cover three months of expenses, while about a quarter have no emergency savings at all.

"When every dollar in your wallet counts ... any dollar that doesn't go as far as it used to can really result in you having to make tough choices about how to manage your money," Foster said.

From the archives (June 2025): If Trump signs his big bill into law, America could end up with a social safety net that 'barely functions'

Worsening the issue are cuts to SNAP benefits, which provide basic food assistance for more than 40 million Americans.

Some of the changes to eligibility rules and more stringent work requirements might not be direct cuts to children's benefits, but they make it difficult for families to qualify or maintain their benefits, said Alexis Bylander, a senior child-nutrition policy analyst at the Food Research & Action Center, a nonprofit advocacy group.

If families find the amount in benefits they're receiving to be too low as a result of recent cuts and rule changes, they might find SNAP is no longer worth the administrative hassle of documenting work hours and reporting income, Bylander noted. And if they choose to leave the program, their children lose direct certification, which schools use to determine which students are automatically eligible for free lunch.

Once a child loses this automatic eligibility, they have to apply for free meals through a separate school application process that results in many children falling through the cracks, Bylander said.

"There are language and literacy barriers to filling out the form. There is shame or embarrassment about being identified as a low-income household," she said. "It's hard for households to accurately count up their household income if they work multiple jobs, if they work seasonal jobs, if they're a part of the gig economy, and they're afraid to fill it out incorrectly."

See more: 'Medicaid and food stamps are easy targets': House bill makes unprecedented cuts to Medicaid and SNAP

States with Healthy School Meals for All programs, which provide free breakfast and lunch to all students free of charge, could find themselves in a difficult position where federal funding cuts push them to reduce their own SNAP benefits or decrease eligibility. Cuts to SNAP benefits are also expected to reduce the number of schools eligible for the Community Eligibility Provision, which allows high-poverty schools to serve free meals to students without their families having to fill out SNAP applications.

Bylander expects these changes, along with the rising cost of food, to be detrimental to low-income families.

"Kids need access to healthy food at school and at home," she said. "The cuts to SNAP threaten that for their home environment and also for their access to food during school."

White House officials maintain that SNAP cuts will combat fraud and strengthen the program for those who need it most.

"Since President Trump took office, real wages have risen, overall inflation has cooled, and the prices of everyday essentials like gas and eggs have markedly declined," White House spokesman Kush Desai told MarketWatch in an email. "As the administration's pro-growth policies of tariffs, deregulation, and the One Big Beautiful Bill's tax cuts take effect and trillions in investments continue pouring into our economy, Americans can rest assured that the best is yet to come as we transition to a new golden age of American greatness."

(MORE TO FOLLOW) Dow Jones Newswires

August 26, 2025 07:30 ET (11:30 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.