March 6, 2026
ruskpp/Depositphotos.com
How Will The Iran Conflict Affect US Retail?
The Iran conflict could disrupt supply chains, drive up energy and freight costs, and weaken consumer demand depending on its duration and severity.
Commercial ship traffic through the Strait of Hormuz — where about a fifth of the world’s oil supply typically travels, and a key route for commodities like aluminum, sugar, and fertilizer — remains at a near standstill amid ongoing strikes by the U.S. and Israel, coupled with threats from Iran to fire on tankers.
Typically, about 138 vessels travel through the Strait of Hormuz every 24 hours — but that has dropped to “single-digit levels” in recent days as some vessel operators and insurance companies suspend operations, according to a March 5 statement from the Joint Maritime Information Center.
Some shipping companies are rerouting vessels around the Cape of Good Hope in Africa and adding surcharges to compensate for additional risks, also factoring in the extra fuel and labor for a longer journey.
The outbreak of the Iran war adds a new layer of stress to global supply chains already strained by the rise of tariffs and other trade barriers. The instability is seen reducing the prospects of container shipping returning to the Red Sea and Suez Canal routings following a pullback in attacks on ships by Yemen’s Houthi rebels.
US-Iran Conflict Could See Shipping Congestion Affect American Ports, Retail Pricing
Although nearby regions in Europe and Asia are most directly impacted, the shipping congestion is expected to eventually unsettle U.S. ports.
“The supply chain is kind of like a long train with many cars and each car represents, let’s say, a port in the world. Well, if one car gets derailed, it can very often have a domino effect to many other cars behind it or in front of it,” Michael Goldman, general manager North America of CARU Containers, told the Associated Press. “So although we only have a small number of ports affected by this military action, it can really have a big effect on the total supply chain.”
Disrupted energy supplies to Europe and Asia likely mean higher prices for Americans as the global price of oil and natural gas rises.
Gasoline prices in the U.S. reached $3.32 on Friday, increasing 34 cents, or about 11%, over the past week — the highest price since September 2024. Market watchers see continued volatility ahead that could dampen broader spending.
“[Higher gas prices are] particularly hard on lower-income households that spend a higher share of the budget on gas,” Mark Zandi, chief economist at Moody’s, told CNBC. “That’s the group that’s already under a lot of financial pressure.”
Further, Zandi said, “Higher gasoline prices have an outsized impact because it hurts consumer sentiment. That affects their ability and willingness to spend, and that weighs on the economy.”
A full 70% of consumers say gas prices affect their feelings about the economy, according to the National Association of Convenience stores. Along with ongoing tariff pressures, any related higher shipping costs, delayed cargo, and elevated insurance premiums are expected to add inflationary pressures for food, chemicals, electronics, and other imports should the conflict drag on.
BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Carol Spieckerman
President, Spieckerman Retail
Brian Cluster
Insights Consultant
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Discussion Questions
What are the obvious and less obvious ways U.S. retail may be impacted by the widening Iran conflict?
Do gas prices have an outsized impact on consumer psyche or is the effect generally exaggerated?
Poll
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The most direct impact will be on inflation. If oil prices go up and remain up, the cost of many things will rise accordingly. That doesn’t cause a major price hike, but it will exacerbate already sticky inflation. The more immediate impact is on rising gas prices which reduce discretionary spend. But, again, this has to persist for a prolonged period of time to have a material impact on retail sales.
Let’s see…
• Iranian tourists will stop coming to Madison Avenue to shop – irrelevant
• Prices of petroleum-based products may temporarily go up, and go back when the conflict is over – a mixed bag
• The price of pistachios and dates may go up – not a huge impact on retail
• Persian lamb/astrakhan coats will not flow into the US – they haven’t for decades anyway
I think that’s it.
The most obvious way consumers may be impacted by a widening conflict is by rising prices, but less obviously is in how this impacts underlying consumer sentiment. Gas prices have an oversized impact on consumers, not only because it impacts such a large percentage of the population, but because consumers are reminded of it every time they drive by a gas station and the posted price increases. It’s like a massive outdoor advertising campaign reminding consumers that things are getting worse. And while rising gas prices are troubling enough, this is lumped on top of an uptick in unemployment rate, and tariff-induced inflation. Consumers drive the economy, and they are being severely tested.
This messy, motive-free war is going to have wide-ranging impacts we cannot yet see. If Iran’s ally China decides to get involved, if the conflict widens even further than it has, no one can foresee the results, but they won’t be good.
Not unlike tariffs, the conversation around gas prices is very much wait-and-see, yet it has an outsized impact on consumer confidence. Gas prices have already experienced the largest single-day increase since March 2022, with some predicting prices could rise 5 to 10 cents a day for the near term. There’s no clear trajectory beyond that, but we do know that as oil prices rise, gas prices follow. And gas prices arguably have more political and psychological energy than any other economic variable. Consumers are laser-focused on the pump, possibly even more so than on grocery prices.
The ripple effects of fuel prices are far-reaching and underestimated. Higher gas prices impact air travel, delivery services, and any business built around mobility. Products with petroleum-based ingredients will see cost increases, and the entire logistics chain becomes more expensive. It’s a compounding effect that touches nearly every corner of retail.
As usual, some retailers are better built to withstand this latest headwind. Regardless of where people shop, rising gas prices strain household budgets, which softens discretionary spending.
The million-dollar question is how long and how high?
A prolonged war would rattle U.S. and global retail. The closure of the Strait of Hormuz is disrupting supply chains and affecting availability, including raw materials. Gas prices are rising, and further hikes will strain more household budgets. More uncertainty and inflation could have a chilling effect on consumption, investments and hiring.
Well if we lose…..
(OK, let’s not go there)
The immediate impact, as others have noted, will be is oil prices. But longer term I think it will exacerbate the unease many people feel about the economy. I suppose a brilliantly executed campaign could actually settle things by increasing faith in the Administration – where could that go but up..right? – but I think I’ll place my bets on Target turning around ahead of that happening.
The most immediate impact of a widening Iran conflict on U.S. retail would likely come through energy markets, particularly fuel prices. Retailers and consumer brands are highly sensitive to transportation costs, and increases in oil prices quickly translate into higher freight, distribution, and manufacturing expenses. When those pressures are layered on top of the lingering effects of tariffs and recent softness in employment data, the result is a more challenging operating environment for both retailers and suppliers. Higher input costs often translate into pricing pressure, tighter margins, or both, which ultimately affects what consumers see on the shelf.
There are also less obvious effects. Supply chains remain globally interconnected, and geopolitical conflict can introduce volatility in shipping routes, insurance costs, and commodity markets. Even categories that appear unrelated to energy—such as apparel, electronics, and food—can experience cost pressure through logistics or raw materials. For retailers already managing tariff-driven sourcing changes and holiday-season inventory planning, additional geopolitical uncertainty adds another layer of complexity to pricing and procurement decisions.
Fuel prices, in particular, have an outsized psychological effect on consumers. Because gasoline prices are posted prominently and updated frequently, they serve as a visible signal of economic stress in a way most other goods do not. Whether the financial impact is large or modest relative to total household spending, rising pump prices can quickly dent consumer confidence. When that sentiment combines with concerns about inflation, tariffs, and employment trends, it can lead shoppers to become more cautious—trading down, delaying purchases, or becoming more promotion-driven. For retailers, the real risk is not just higher costs but also the potential to weaken consumer sentiment at a time when the industry is already navigating a complex economic backdrop.
As of Sunday night (3/8), AAA has reported that gas prices have increased 50 cents a gallon which is an extremely high jump in a week which I don’t recall ever happening before. Retailers, wholesalers and suppliers will have to decide how long this higher shipping costs will last and if there is a material impact on their business. Will this cause some temporary surcharges on delivery for restaurants or retailers? Time will tell.
From a consumer standpoint, two major news items hit their radar last week, a job count decline of 92k and higher gas prices. With a 15% increase in gas prices consumers will likely adjust in other areas of their life with grocery and other retail purchases being one of the easiest to change. For households with a tight budget, the quick jump gas prices will have an impact on their psyche.
There is no exit plan for this war, at least not one that anyone in the administration can articulate. As this thing drags out, there’s every chance that we could see $5.00 a gallon gas across the country, $8.00 in California. That will drive up food prices, as it will increase production and transportation costs. Farmers are already buckling under the administration’s policies; one more shock will be devastating to the sector. The impact on retail will be significant. Unless something changes quickly and the war ends soon, the shock to global economic systems will be significant and acutely felt by consumers at the shelf.
We already had discomfort and uncertainty concerning inflation and tariffs, and now we have started a war over a threat that was supposedly ‘obliterated’ last summer. Rather than deal with domestic issues with the energy and focus they derserve, we are dealing with international issues in a manner that can only make our domestic problems worse. And the dominoes from this totally discretionary action are only beginning to unfold. Will reason prevail, or will yet another series of irrational decisions take uncertainty to another new level? Impact on retail? Apart from short term oil prices, what about longer term OTB considerations? The whole market is deep into planning and placing orders for Fall 2026. What’s the prudent thing to do for OTB planning for Fall/Winter 2026…???
Don’t worry, Jeff. While you are correct, it won’t affect the top 1% and hardly the top 2%.
In current scenario, oil and gas prices has already impacted with negative sentiment. Do anyone think that though companies have increase retail price due to current circumstance will bring down the price later. Oil is going to drive inflation to another 10%-15%.
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The most direct impact will be on inflation. If oil prices go up and remain up, the cost of many things will rise accordingly. That doesn’t cause a major price hike, but it will exacerbate already sticky inflation. The more immediate impact is on rising gas prices which reduce discretionary spend. But, again, this has to persist for a prolonged period of time to have a material impact on retail sales.
Let’s see…
• Iranian tourists will stop coming to Madison Avenue to shop – irrelevant
• Prices of petroleum-based products may temporarily go up, and go back when the conflict is over – a mixed bag
• The price of pistachios and dates may go up – not a huge impact on retail
• Persian lamb/astrakhan coats will not flow into the US – they haven’t for decades anyway
I think that’s it.
The most obvious way consumers may be impacted by a widening conflict is by rising prices, but less obviously is in how this impacts underlying consumer sentiment. Gas prices have an oversized impact on consumers, not only because it impacts such a large percentage of the population, but because consumers are reminded of it every time they drive by a gas station and the posted price increases. It’s like a massive outdoor advertising campaign reminding consumers that things are getting worse. And while rising gas prices are troubling enough, this is lumped on top of an uptick in unemployment rate, and tariff-induced inflation. Consumers drive the economy, and they are being severely tested.
This messy, motive-free war is going to have wide-ranging impacts we cannot yet see. If Iran’s ally China decides to get involved, if the conflict widens even further than it has, no one can foresee the results, but they won’t be good.
Not unlike tariffs, the conversation around gas prices is very much wait-and-see, yet it has an outsized impact on consumer confidence. Gas prices have already experienced the largest single-day increase since March 2022, with some predicting prices could rise 5 to 10 cents a day for the near term. There’s no clear trajectory beyond that, but we do know that as oil prices rise, gas prices follow. And gas prices arguably have more political and psychological energy than any other economic variable. Consumers are laser-focused on the pump, possibly even more so than on grocery prices.
The ripple effects of fuel prices are far-reaching and underestimated. Higher gas prices impact air travel, delivery services, and any business built around mobility. Products with petroleum-based ingredients will see cost increases, and the entire logistics chain becomes more expensive. It’s a compounding effect that touches nearly every corner of retail.
As usual, some retailers are better built to withstand this latest headwind. Regardless of where people shop, rising gas prices strain household budgets, which softens discretionary spending.
The million-dollar question is how long and how high?
A prolonged war would rattle U.S. and global retail. The closure of the Strait of Hormuz is disrupting supply chains and affecting availability, including raw materials. Gas prices are rising, and further hikes will strain more household budgets. More uncertainty and inflation could have a chilling effect on consumption, investments and hiring.
Well if we lose…..
(OK, let’s not go there)
The immediate impact, as others have noted,
will beis oil prices. But longer term I think it will exacerbate the unease many people feel about the economy. I suppose a brilliantly executed campaign could actually settle things by increasing faith in the Administration – where could that go but up..right? – but I think I’ll place my bets on Target turning around ahead of that happening.The most immediate impact of a widening Iran conflict on U.S. retail would likely come through energy markets, particularly fuel prices. Retailers and consumer brands are highly sensitive to transportation costs, and increases in oil prices quickly translate into higher freight, distribution, and manufacturing expenses. When those pressures are layered on top of the lingering effects of tariffs and recent softness in employment data, the result is a more challenging operating environment for both retailers and suppliers. Higher input costs often translate into pricing pressure, tighter margins, or both, which ultimately affects what consumers see on the shelf.
There are also less obvious effects. Supply chains remain globally interconnected, and geopolitical conflict can introduce volatility in shipping routes, insurance costs, and commodity markets. Even categories that appear unrelated to energy—such as apparel, electronics, and food—can experience cost pressure through logistics or raw materials. For retailers already managing tariff-driven sourcing changes and holiday-season inventory planning, additional geopolitical uncertainty adds another layer of complexity to pricing and procurement decisions.
Fuel prices, in particular, have an outsized psychological effect on consumers. Because gasoline prices are posted prominently and updated frequently, they serve as a visible signal of economic stress in a way most other goods do not. Whether the financial impact is large or modest relative to total household spending, rising pump prices can quickly dent consumer confidence. When that sentiment combines with concerns about inflation, tariffs, and employment trends, it can lead shoppers to become more cautious—trading down, delaying purchases, or becoming more promotion-driven. For retailers, the real risk is not just higher costs but also the potential to weaken consumer sentiment at a time when the industry is already navigating a complex economic backdrop.
As of Sunday night (3/8), AAA has reported that gas prices have increased 50 cents a gallon which is an extremely high jump in a week which I don’t recall ever happening before. Retailers, wholesalers and suppliers will have to decide how long this higher shipping costs will last and if there is a material impact on their business. Will this cause some temporary surcharges on delivery for restaurants or retailers? Time will tell.
From a consumer standpoint, two major news items hit their radar last week, a job count decline of 92k and higher gas prices. With a 15% increase in gas prices consumers will likely adjust in other areas of their life with grocery and other retail purchases being one of the easiest to change. For households with a tight budget, the quick jump gas prices will have an impact on their psyche.
There is no exit plan for this war, at least not one that anyone in the administration can articulate. As this thing drags out, there’s every chance that we could see $5.00 a gallon gas across the country, $8.00 in California. That will drive up food prices, as it will increase production and transportation costs. Farmers are already buckling under the administration’s policies; one more shock will be devastating to the sector. The impact on retail will be significant. Unless something changes quickly and the war ends soon, the shock to global economic systems will be significant and acutely felt by consumers at the shelf.
We already had discomfort and uncertainty concerning inflation and tariffs, and now we have started a war over a threat that was supposedly ‘obliterated’ last summer. Rather than deal with domestic issues with the energy and focus they derserve, we are dealing with international issues in a manner that can only make our domestic problems worse. And the dominoes from this totally discretionary action are only beginning to unfold. Will reason prevail, or will yet another series of irrational decisions take uncertainty to another new level? Impact on retail? Apart from short term oil prices, what about longer term OTB considerations? The whole market is deep into planning and placing orders for Fall 2026. What’s the prudent thing to do for OTB planning for Fall/Winter 2026…???
Don’t worry, Jeff. While you are correct, it won’t affect the top 1% and hardly the top 2%.
In current scenario, oil and gas prices has already impacted with negative sentiment. Do anyone think that though companies have increase retail price due to current circumstance will bring down the price later. Oil is going to drive inflation to another 10%-15%.