The escalating conflict in the Middle East—already pushing gasoline prices up and threatening to spike prices across the entire retail supply chain—has put retailers and consumers on edge. 

“The longer this lasts, the more significant the shock would be,” said Gregory Daco, chief economist at EY-Parthenon, predicting that the rise in gas prices could push month-over-month inflation as high a 1% in March, marking the highest monthly increase in four years. “That’s a significant shock in and of itself,” he added.

Compounding the pressure is uncertainty around tariffs and stretched consumer budgets amid persistent inflation. Retailers once again find themselves in the hot seat, trying to attract customers, grow revenue and maintain margins. 

Consumers already see what’s coming and are prepared to ride out the storm, according to a new survey conducted in February among a nationally representative sample of 1,000 U.S. consumers by RetailNext. They’ve narrowed their shopping decisions to a single factor: price. Retailers that meet them there are best positioned as this challenging retail year unfolds. 

“Retailers are investing heavily in AI, loyalty programs and in-store experiences, but our new data shows consumers want something else,” shared Joe Shasteen, RetailNext’s global manager of advanced analytics. “Everything is really being driven by price with consumers looking for the best deal.”

Hoping For The Best, Planning For The Worst

Consumers are expecting 2026 to be a challenging year. Nearly half of those surveyed said inflation and the rising cost of living will weigh heavily on their shopping decisions this year. 

Notably, the question of tariffs has moved from an abstract government policy issue to the single macro factor influencing the shopping decision for 13% of the shoppers surveyed—a number that would have been near zero in surveys just two years ago.

Retailers, such as Walmart and Costco, which were remarkably transparent about how they would mitigate last year’s “Liberation Day” tariffs to absorb costs and hold the line on prices, provide a model for handling the issue as consumer awareness of tariffs and their impact on prices increases. 

Retailers must be proactive in communicating how they are managing prices and demonstrate the ways they are working for customers to keep prices down. Without that transparency, consumers will interpret price increases as “retailer opportunism”—a blow to consumer trust. 

Some 71% of consumers said that retailers’ top investment this year should be lowering prices—way ahead of number two, improved in-store experiences (12%), number three, faster experiences (11%), and number four, loyalty perks (6%).  

In the meantime, consumers will continue to trade down, wait for retail promotions and reduce impulse purchases as a hedge against continued macro-economic uncertainties.

Price Before All

“Price is the experience—full stop,” Shasteen asserted. “Price stability and transparency are now competitive differentiators.” 

The survey revealed that 34% of consumers said they would stop shopping at a retailer entirely if they find unfair or unpredictable pricing. This ranks way ahead of poor product quality or bad customer experiences. 

RetailNext warns that shoppers are increasingly wary of dynamic and algorithmic pricing strategies. “In an environment where pricing inconsistencies are surfaced instantly on social media, perceived unfairness carries outsized brand damage,” the report stated. 

For example, Walmart has just rolled out digital shelf labels to 2,300 locations with chain-wide adoption coming next year. While the company positions the technology as a way to free up staff time so associates can focus on customers, many shoppers are suspicious, seeing such dynamic pricing tools as a new form of price gouging. 

Some even worry that these shelf labels have hidden cameras, reflecting wider trust concerns that retailers could weaponize advanced technology against them.  

AI Becomes Price Comparison Tool

While retailers are investing heavily in AI—McKinsey projects B2C agentic commerce could unlock upwards of $1 trillion by 2030—consumers are saying not so fast. It’s going to take time for consumers to build trust in AI shopping tools. Only 13% of those surveyed said they trust AI recommendations, while 55% said their trust was “conditional,” and 32% said they never trust AI shopping recommendations. 

On the other hand, AI is already influencing their shopping behavior. About one-third said they regularly use AI for pricing comparisons before most purchases, effectively turning it into a price-hunting tool to find the best price across retailers. 

“Consumers are adopting AI as a price-hunting utility, rather than a trusted discovery or personalization engine. This behavior will accelerate as tools become more capable and accessible,” RetailNext reports.

Customer Trust Is On The Line

In 2026, the customer-retailer trust bond is fragile. With consumers feeling growing anxiety about the broader economy—as well as regarding their own financial prospects—consumers are demanding retailers hold the line on price increases, even dial them back wherever possible. Some 63% of consumers say they’ll go out of their way to shop in-store if they can find better prices there than online.

Increasingly, shoppers are concentrating their spending around big retail promotions (40%), and the promotions that matter most are straightforward price discounts (56%), far ahead of loyalty rewards (20%) or BOGO deals (11%).  

Retailers have long worried about the race to the bottom on prices, but it appears to be the path consumers are pushing them on. 

“Promotional calendars are training consumer behavior,” the report cautions. “The more a retailer relies on discount events to drive volume, the more shoppers defer purchases until those events occur. Escaping this cycle requires everyday low prices or products and experience differentiation that is genuinely hard to replicate.” 

In the end, the real race isn’t to the bottom on price—it’s to the top on trust.