Iran Conflict Pressures Retail Operations
Iran War Ripples Through Retail Economy

By the D&D Daily staff

The ongoing conflict involving Iran is creating a wide-ranging ripple effect across the retail industry, extending far beyond higher gas prices. While rising fuel costs are the most visible impact, the broader consequences touch nearly every aspect of retail operations—from sourcing and logistics to pricing and consumer demand.

At the core of the disruption is energy. Oil prices have surged sharply amid threats to the Strait of Hormuz, a critical shipping route that handles roughly 20% of global oil supply. Because fuel accounts for up to 50–60% of shipping costs, retailers are facing significantly higher transportation expenses across ocean freight, trucking and last-mile delivery. These increases are quickly flowing through supply chains and into product pricing.

Beyond fuel, the conflict is straining the availability of key raw materials. Global supply chains for inputs such as petrochemicals, fertilizers and industrial materials are being disrupted, affecting categories ranging from apparel and home goods to packaged food. Retailers reliant on global sourcing are encountering delays, cost volatility and reduced inventory predictability.

Consumer behavior is also shifting. Rising costs for fuel, groceries and utilities are placing pressure on household budgets, leading to reduced discretionary spending. Early indicators show declining consumer confidence and a pullback in non-essential purchases, particularly impacting apparel, electronics and specialty retail segments.

Financial conditions add another layer of complexity. Market volatility and rising interest rates tied to inflation concerns are increasing borrowing costs for retailers while dampening investment and expansion plans.

Taken together, the Iran conflict is creating a multi-front challenge for retailers. Elevated operating costs, supply chain uncertainty and weakening consumer demand are converging at once—forcing retailers to balance pricing strategies, inventory management and margin protection in an increasingly unpredictable environment.


Stores Remain As Important As Ever
In the age of AI, Home Depot’s stores have ‘never been more relevant’

While the retailer has been ramping up its AI-powered offerings, it aims to provide a frictionless experience across a customer’s shopping journey, wherever that may be.

While AI was top of mind for the more than 10,000 attendees at this year’s Shoptalk Spring conference, The Home Depot doesn’t see it overtaking the physical shopping experience.

“Twenty-five years ago, the conversation was, ‘Is the store going to be relevant in an age of e-commerce?’” Jordan Broggi, executive vice president of customer experience and president of online at Home Depot said during a Wednesday session. But now in the age of AI and agentic commerce, “the store has never been more relevant than it is today.”

But even though the home improvement retailer views the technology as just one avenue for customers to shop within its overall ecosystem, it has made significant strides with AI over the past year.

Home Depot also understands customer shopping preferences vary: Some customers want to engage with AI tools for assistance, while some know exactly what they want and can search for it quickly on the retailer’s website. And still, others prefer speaking to an associate in store before making a purchase, according to Angie Brown, chief information officer at Home Depot.

“It’s creating the experience that works for a variety of different customers, across a variety of different journeys, and meeting them in the moment for what they need,” Brown said during the Wednesday session. retaildive.com


Is Retail Hitting an AI Speed Bump?
Retailers 'stuck' in exploring, planning phases of AI integration
Retailers agree that artificial intelligence is key for the future, but a majority have yet to fully adopt the technology.

While 83% of retailers indicate that AI is a necessity to compete, only 6% of retailers rate their current AI capabilities as "mature,” according to a new survey from Verizon Business and Cisco. Those who have yet to fully integrate AI say they are stalled in the "exploring" (31%) or "planning" (37%) phases.

Retailers surveyed cited poor or siloed data (55%) as a deployment challenge when implementing AI, while system integration challenges (48%) and lack of specialized talent (44%) also hinder progress.

Data infrastructure (56% overall priority) and upgrading the network and computing abilities (42%) were noted as the biggest priorities for getting AI implemented. The survey noted that 61% of retailers reported revenue loss from slow digital experiences, and 55% from in-store mobile app crashes, highlighting that network infrastructure upgrades are needed.

Two-thirds (67%) of network upgrades are driven by AI and machine learning applications, followed by IoT and sensor networks (56%) and computer vision (54%). The report noted that the workloads demand high bandwidth and low latency, pushing traditional infrastructure past its limits. chainstoreage.com


Will Costco Benefit from Gas Price Surge?
Costco gas plans change as pump prices rise

Costco’s new strategy for gas may surprise members.

Gas prices keep going up, and that’s unlikely to change, unless the ongoing war in Iran ends. “The national average for a gallon of regular gasoline is up 10 cents from last week and one dollar since last month,” according to data from AAA. Prices have been driven higher by the war.

That creates a short-term opportunity for low-cost gas providers, including Costco. The warehouse club, however, has chosen to make a longer-term bet that it can grow its memberships based on gas sales.

Costco, he noted, offers some relief to consumers. Some gas stations offer lower prices than others, especially those at wholesale membership clubs, such as Costco, Sam’s Club, and BJ’s Wholesale Club,” De Haan said. Costco has used low-priced gas to drive memberships.

“When prices are higher, that will tend to cause members to maybe take the extra mile that it might involve to get to the gas station because of the incremental value they see there,” Millerchip added. thestreet.com


Target boosts employee discount; reportedly rolling out new dress code rules
Store workers will be required to wear sleeved-red shirts and either blue denim or khaki pants, shorts or skirts, reported NBC Chicago. (Previously, graphic or patterned red shirts and jeans of other colors had been allowed.)

Which retailers win and lose from high gas prices? Deutsche Bank sorts it out
Companies indexed to higher-income customers are more likely to weather higher gas prices, the firm found.

Instacart increases fuel benefits for shoppers amid gas price surge

Kroger to reportedly open two stores, invest $112 million in Ohio

Designer Brands brings together US, Canada retail businesses

The Bay Area is growing again — but something isn’t adding up


Last week's #1 article --

Retailers Deploy Bodycams to Fight Rising Theft & Incivility
As Theft and Customer Incivility Rise, Bodycam Adoption in Retail will Climb
A YouGov poll of American adults from mid-2025 revealed a notable shift in sentiment around body-worn cameras. Once considered the domain of law enforcement, bodycams are now increasingly visible across everyday environments — from stores to medical offices, transit systems and venues. And it turns out that people are in favor: according to YouGov, 70% of respondents are either comfortable with, or indifferent to, seeing body-worn cameras worn by employees in more settings.

The National Retail Federation (NRF) and Loss Prevention Research Council’s October 2025 report, The Impact of Retail Theft & Violence 2025, highlighted how theft, organized retail crime and in-store violence remain persistent and costly challenges for retailers. For those navigating rising theft and customer incivility, the shift in perception of bodycams removes one of the biggest barriers to adoption — paving the way for more deployments in 2026 and beyond.

Early retail deployments of bodycams focused on stores that were considered high-risk – those with a track record of higher theft or incidents of violence. But the scope is widening today as retailers take a more proactive approach to deterring incivility before it happens. Major retailers including H&M, Target, Walmart and Aldi all have publicly acknowledged their use of bodycams as part of their loss prevention strategies.

The appeal is clear: Bodycams introduce a visible deterrent at the point of interaction. When potential offenders know an encounter is being recorded, behavior often changes. In fact, according to the aforementioned YouGov research, 44% of respondents admitted they would think twice about their behavior if they knew employees were wearing body-worn cameras.

Situations de-escalate faster. Associates feel more confident enforcing policies. And when there is an incident, having objective footage provides an unbiased, thorough record for internal review, law enforcement collaboration and legal proceedings — should it get to that point. Importantly, bodycams don’t replace existing security infrastructure — they complement it. Fixed cameras show what happened from afar; body-worn cameras capture an up-front live view of how it unfolded and what was said. retailtouchpoints.com