Retailers across the globe are bracing for disruption as escalating conflict in the US, Iran, and the Middle East threatens supply chains, tourism spending and logistics costs.
While consumer demand has not yet collapsed, early signs point to supply bottlenecks and shifting spending habits that could weigh on retail performance in the coming months, according to multiple media reports and industry analysts.
“Retail and tourism are in for a rough time,” said Maire Morris, founder of Morris Global Consulting, told AGBI.
“Cancellations over the next few months are inevitable, massively affecting tourism spending which is significant in high season.”
She added that the most immediate changes are already visible on the ground.
“The immediate impact is lower mall traffic and a clear shift in spending from discretionary categories to essentials.”
Across the region, many malls remain open but operations have been disrupted.
In the UAE, AGBI reported that most stores are still trading, though some retailers have reduced staffing levels as employees work remotely where possible.
Logistics pressures are also mounting. According to Channel News Asia, retailers expect the cost of shipping goods to and from the Middle East to rise by as much as 30 percent as shipping lines introduce war-risk surcharges.
These charges can reach around US$3920 per container, while shifting trade routes could delay deliveries by up to two weeks.
The conflict has also prompted operational changes among major retail groups.
Chalhoub Group, which operates around 900 stores for brands including Versace, Jimmy Choo and Sephora, said its Bahrain stores were closed while locations in the UAE, Saudi Arabia and Jordan remained open with voluntary staff attendance.
“We operate with a lean team formed of members who volunteered and feel comfortable to come to the store,” Lynn Al Khatib, VP of communications for Chalhoub Group told Reuters, adding that company leaders visited Dubai Mall and the Mall of the Emirates to check on staff.
Other global companies have taken similar precautions. Amazon temporarily closed its fulfillment center in Abu Dhabi and suspended deliveries across the region while advising employees in Saudi Arabia and Jordan to remain indoors, according to Business Insider.
Luxury group Kering, which owns brands including Gucci, said its stores in the UAE, Kuwait, Bahrain and Qatar were temporarily closed and travel to the Middle East had been suspended.
Although the Middle East represents a relatively small share of global luxury spending – around 5 to 10 percent, according to RBC analyst Piral Dadhania the region has been one of the industry’s fastest-growing markets.
Travel disruptions could now threaten that momentum.
Closed airports and security concerns are slowing tourism flows into key shopping hubs, while missile strikes may deter visitors if the conflict persists.
Authorities are meanwhile attempting to prevent price gouging as supply costs rise. Minister of Economy & Tourism Abdullah bin Touq Al Marri warned businesses against unjustified price increases.
“We’re making sure no one takes advantage of the situation to raise prices without valid reasons, not just on essentials, but on all products and services,” he said.
- Further reading: UAE government moves to calm panic buying as retailers assure supply
