Rising fuel prices could hike grocery prices, limit store visits

Rising fuel prices resulting from the US-Israeli war with Iran could spell bad news for retail sales, according to new analysis from Coresight Research.

Coresight’s latest monthly report predicts that rising gas prices resulting from the conflict will have an “upward pressure” on grocery prices, and that items with a short shelf life “will be the first to feel the impacts of the energy spike.” Consumers also will be “limiting non-essential trips to stores” to conserve gas, the report predicts.

It will surprise no one that Coresight predicts lower-income consumers will feel the most pinched, as gas and groceries demand an outsized portion of their disposable income. But even affluent consumers could tighten the purse springs as a result of stock market volatility caused by the Middle East conflict, per Coresight.

It’s never a bad idea to have physical stores looking as good as they do in their commercials, but if it’s costing shoppers more to get to them and they’re facing higher prices, it can’t hurt to be snappy about cleaning up that spill in Aisle 7. Or, as Coresight puts it slightly more officiously, “retailers should not overlook the store fundamentals, such as in-store execution, in supporting traffic and sales in discretionary retail.”

In this volatile political climate and economy, “uncertainty is the new certainty,” Coresight declares Rumsfeldingly, not once but twice in the report. Still, Coresight projects retail sales will grow 4.2% YoY in March, then slow down to about 3.5%–3.7% in April and May.

NRF recently predicted that retail sales would increase 4.4% in 2026 over last year, but didn’t factor the Iran war into its calculation, because there’s “too much uncertainty,” Mark Mathews, NRF’s chief economist and executive director of research, said. NRF, he continued, “will continue to assess potential impacts and issue a re-forecast if circumstances dictate so.”