These retailers will be hit the most by the coming surge in gasoline prices

As the Iran War roils global energy markets, off-price retailers are likely to come under more pressure than other chain stores, according to Wolfe Research. That’s because those retailers, including Dollar General and Walmart and other companies primarily serve lower-income shoppers who could soon be forced to tighten their purse strings due to rising gasoline prices, the research firm said in a note Sunday. Since the U.S.-Iran conflict began earlier this month, crude oil prices have risen to levels not seen since 2022. West Texas Intermediate futures and Brent crude nearly hit $120 per barrel overnight. They last traded at $100.41 and $102.59, respectively. WTI started the year below $60, while Brent began 2026 below $61. “While this oil choke point has long been well understood, the squeeze is here,” analyst Spencer Hanus said. “Lower income [shoppers will be] hit harder by this latest oil surge.” For every $1 increase in the price of oil, consumer spending suffers a 70 basis-point (0.7 percentage point) decline, according to the Wolfe. Among the stocks covered by the firm, Dollar General, Walmart and Advance Auto Parts have the lowest income customers, making them most likely to decline as energy prices surge. Shares of Dollar General have fallen 5% over the past week, while Walmart and Advance Auto Parts have shed nearly 3% and 7%, respectively. “With the impact on consumer confidence, investors should also expect a trade-down to consumables and non-discretionary items,” Hanus wrote. The analysts added that housing trade retailers, especially floor and decor stores, could face headwinds because of their reliance on Chinese imports. The Shanghai Containerized Index is already moving higher, largely due to logistical issues in ports in Southeast Asia that are frustrating efforts to ship products to the Middle East. In addition, retailers with bigger discretionary mixes, including Five Below and Target , may take hits as consumer confidence plunges due to energy market headwinds.