"We're dealing with it, no need to worry."
That was Defense Secretary Pete Hegseth's line on Friday, during a Pentagon briefing, about Iran's closure of the Strait of Hormuz. Translating from politician-speak to the language of people who actually pay bills: "Screw off, it's not my job to explain this to you."
Meanwhile, on the other side of the world, Iran's new Supreme Leader, Mojtaba Khamenei, said Thursday that the blockade of the Strait should continue as a "tool of pressure against the enemy." The guy's first public statement in the job, and he came out swinging.
For those who don't know — and you should — the Strait of Hormuz is the chokepoint through which tens of millions of barrels of oil flow every single day, along with fertilizers, metals, and a boatload of raw materials that keep the world spinning. Shut that faucet off, and the domino effect is just a matter of time.
The dominoes are already falling
C.H. Robinson, one of the largest logistics operators on the planet, put out a statement Friday warning that capacity is "constrained," cargo acceptance is "selective," and fuel costs are creating "price volatility and variable service conditions."
Translation: it's a mess. Nobody knows how much it's going to cost to ship anything anywhere.
Max Kahn, president of Coresight Research, was more blunt with CNBC: the disruption to the global supply chain may already be pushing retail to the breaking point. And look — American retailers spent the past few years learning to be flexible — first with the pandemic, then with the tariff blitz of 2025.
But flexibility has limits. You can only stretch a rubber band so far before it snaps.
Groceries first, clothes later
Kahn pointed out something that makes total sense: grocery prices should be the first to spike. The food supply chain is less flexible. You can't just "pause" food production and pick it back up later like nothing happened. Tomatoes rot. Wheat has growing seasons. Fertilizer — which flows through Hormuz — doesn't materialize out of thin air.
Apparel retail, on the other hand, has more room to maneuver. You can hold production, stretch inventory, redistribute. But it's not unscathed: clothing shipments from Inditex (Zara's parent company) and other retailers were stuck last week when flights across the Middle East were canceled. Remember that new shirt that was supposed to hit the store? It's sitting in a warehouse somewhere between Dubai and chaos.
Retail's lose-lose game
Kahn summed up the retailer dilemma perfectly: they're going to face cost pressure (more expensive inputs) and demand pressure (consumers spending less). It's the worst of both worlds — like being caught between the Joker and Two-Face at the same time.
And he drew the parallel to 2022-2023: back then, retail survived by passing prices on to consumers. Price hikes offset the drop in sales volume. The bet is that the same thing happens now. But there's a detail nobody's saying out loud: in 2022, there wasn't a hot war involving the world's biggest oil artery.
More expensive gas is already eroding consumer confidence. Wednesday's CPI came in as expected, but experts are warning that discretionary spending is going to shrink as people have to cover fuel costs. Less money left over for extras. And "extras," in retail speak, is everything that isn't food and basic necessities.
Who survives this war?
Analysts at Wolfe Research have already called it: retailers focused on discretionary products are the ones that'll bleed the most.
The survivors? Walmart, Kroger, Dollar General, Dollar Tree — the low-price battalion. When wallets get squeezed, American consumers do exactly what everyone else does: switch brands, hunt for deals, trade down.
The irony? American retail growth was already "so-so" — Kahn's own words. Now, with the uncertainty of a dragging war, this is starting to splash onto GDP.
So when the Defense Secretary says "no need to worry," the question that lingers is: who exactly is he saying that to? Because the grocery store owner, the clothing importer, the trucker paying for diesel, and the mom checking the price of rice — they've been worried for a long time now.
The war might be over there. But the bill shows up right here.
