Introduction

We discuss US consumer sentiment, potential shopper reactions and implications for retailers amid the Middle East energy shock. This report is based on our Premium Subscriber Call of March 13, 2026.

US Consumer Sentiment Amid the Middle East Energy Shock: Coresight Research Analysis

1. Consumer Sentiment Is Sliding

We track US consumer sentiment weekly on two separate measures—personal financial expectations and wider economic expectations, both over the next 12 months. As shown in Figure 1, which gives a 12-month view, both are now trending downward, although financial expectations began its slide before the Iran conflict began in February.

Prior to February, financial sentiment had generally been improving, following the end of the federal government shutdown.

Figure 1.

US Survey Respondents: Expectations for Their Household Financial Situation/the Economy to Get Better or Worse Over the Next 12 Months—Net Better (% of Respondents, Four-Week Rolling Average)

Data represent total “better” minus total “worse”

Base: US respondents aged 18+

Source: Coresight Research

 

By income group, the decline in sentiment began earliest among the lower of the three income bands charted in Figure 2 (as noted above, this began before the Iran conflict began). This group has since been followed by the middle- and higher-income groups.

Lower-income consumers are more exposed and sensitive to inflation in everyday categories such as gasoline and groceries. We would expect the ripple effects of higher gasoline prices to show up early in groceries, given the frequently replenished nature of the category.

• Expectations for personal finances in the next 12 months among the most affluent group remained almost flat this week. However, this measure is up 6.5 PPTs year over year.
• Net expectations among middle-income households declined significantly this week for the second consecutive week, with expectations among middle-income consumers reaching their lowest level since the end of May 2025. Net expectations among lower-income households improved significantly this week but remained in negative territory.

Figure 2.

US Survey Respondents: Whether They Expect Their Household Financial Situation to Get Better or Worse Over the Next 12 Months—Net Better, by Income (% of Respondents, Four-Week Rolling Average)

Data represent total “better” minus total “worse”

Base: US respondents aged 18+

Source: Coresight Research

 

Economic sentiment has remained more steady, despite widespread coverage of conflict-driven inflation.

• Higher-income consumers’ economic expectations declined significantly this week. However, this measure is up 0.7 PPTs year over year.
• Middle- and lower-income consumers’ economic expectations declined significantly this week.

Figure 3.

All Respondents: Whether They Expect the Economy to Get Better or Worse Over the Next 12 Months—Net Better, by Income (% of Respondents, Four-Week Rolling Average)

Data represent total “better” minus total “worse”

Base: US respondents aged 18+

Source: Coresight Research

 

2. Energy Shock Consumer Impacts

As of March 13, gasoline prices had risen by 17.9% year over year, per our analysis of AAA data.

As shown in Figure 4, the shape of change in absolute prices (USD) and the year-over-year percentage change is very similar to that seen after the Ukraine invasion four years earlier. What differs is that gasoline inflation and prices are both starting from a lower level than in 2022. Post-Ukraine, the rate of inflation stopped increasing after week 3, but it remained highly elevated, at 40+% year over year.

Figure 4.

US Regular Gasoline Prices Following Global Conflicts: 2026 vs. 2022 (YoY % Change and USD per Gal.)

*This week includes the date each conflict started, so is partially post-conflict

Source: US EIA/AAA/Coresight Research

 

Higher gas prices can deter consumers from making trips to shops. Looking back at 2022, we saw a slowdown in the pace of growth in visits to stores, after the Ukraine conflict began and gasoline inflation accelerated (last row in Figure 5). We note that the data come with some “noise” as 2022 saw volatile “year-ago” comparatives that likely impacted year-over-year changes and may overstate the slowdown due to the conflict.

Figure 5.

YoY % Change in Shopper Visits to Stores: Periods Before and After the Ukraine Invasion (2022)

	Shopping Centers	Grocery Retailers	Discount & Dollar Stores	Clothing	Superstores	Dept Stores	Furniture	Gas Stations & C- Stores
Average of the Eight Weeks Immediately Before the Ukraine Conflict	16.6%	12.7%	8.4%	13.7%	8.8%	13.6%	(5.2)%	16.3%
Average of the Four Weeks Immediately Before the Ukraine Conflict	21.2%	12.6%	12.2%	22.7%	12.1%	21.3%	1.9%	19.8%
Average of the First Four Weeks After the Conflict Began	6.7%	10.2%	1.7%	(2.5)%	0.6%	(0.5)%	(15.8)%	9.6%
Average of the First Eight Weeks After the Conflict Began	7.8%	11.9%	8.2%	1.4%	4.6%	2.1%	(15.2)%	10.7%
Four-Week Periods (Before vs. After) PPT Difference	(14.4)	(2.4)	(10.5)	(25.2)	(11.5)	(21.8)	(17.7)	(10.2)

Source: Placer.ai/Coresight Research

 

Tax refunds will provide consumers, in total, with a buffer against higher gasoline prices. Based on data so far this tax season, we expect total refunds for 2026 to increase by around $31-$33 billion versus 2025 (an increase of 9.4%-10% year over year).

That compares to typical monthly consumer spending on gasoline of $31 billion (as of one year ago—March 2025).

If gasoline prices increased at a similar pace we saw in the first eight weeks of the Ukraine invasion in 2022 (about 44% year over year), consumers would face paying out an extra $13.9 billion per month in extra costs. However, gasoline inflation has started from a lower point than in 2022.

If gas prices rose by about 20% year over year, it would cost consumers an extra $6.3 billion per month to buy the same volume of gas. In theory, the increased amount in tax refunds could fund that for just over five months.

Less positively, the Middle East conflict has driven average mortgage rates above 6% again, shortly after falling below that threshold. As of March 6, the average 30-year rate stood at 6.19%, per the Mortgage Bankers Association. The rate has been impacted by 10-year treasury yields. We view 6% as a  psychologically important threshold, given the anecdotal evidence that many would-be buyers had been holding out for sub-6% rates. Higher rates will again depress the housing market and, in turn, housing-related retail sectors, most especially home and home-improvement.

What We Think

Uncertainty is the new certainty, and the Middle East energy shock is likely only to entrench existing macroeconomic trends. Assuming the energy shock is not entirely transient, we expect oil price spikes and gasoline price rises to have the following effects:

• Strengthening overall inflation, due to gasoline prices having a multiplier effect through the economy. We expect 2026 to be the sixth consecutive year of average >2% yearly CPI.
• Upward pressure on food prices: Products with a short shelf-life will be the first to feel the impacts of the energy spike.
• “K-shaped” economy: We expect higher-income consumers to again drive growth as lower-income consumers are more heavily impacted by inflation in essentials such as gasoline and groceries.
• However, there is a downside risk for higher earners’ spending, as stock-market volatility will hit more affluent consumers’ propensity to spend.

Should store traffic tighten, retailers should fight to remain in their shoppers’ consideration set:

• Give shoppers reasons to visit stores—such as with store-based deals, coupons or events.
• Retarget shoppers to drive online purchases—switch the purchase from store to digital and don’t lose the shopper to a rival.

Retailers should not overlook the store fundamentals in discretionary retail, such as in-store execution. For example, Macy’s has been driving comparable sales expansion in those stores that focus on execution in merchandising, service and replenishment.

Across all recent macroeconomic uncertainties—from Covid-19 to tariffs to the energy shock—diversified supply chains remain an underlying strategy for resilience.

In a tougher demand-side market, retailers should explore margin-expansion opportunities, including with technology (including AI) for productivity, and intelligent inventory management.  We believe that this conflict and the energy shock only add greater urgency to solutions that focus on margins as well as sales. If “uncertainty is the new certainty,” we continue to emphasize the opportunities we outlined in our Research Agenda Framework for 2026—at a wider level, this includes rethinking the role of the store, deploying agentic AI for productivity and tapping alternative revenue streams.

Notes

Data and conclusions in this report are as of March 16, 2026