Retailers Pause Reliance on Middle East Suppliers Amid Iran War and Look Closer to Home
Escalating conflict between Iran, Israel and U.S. forces has created severe supply‑chain uncertainty for global retailers. The closure and disruption of shipping lanes through the Strait of Hormuz – one of the world’s most important maritime corridors – has become a critical issue. Nearly one quarter of global exports move through this passage and the conflict has severely constrained activity, prompting companies to reassess their sourcing strategies.
Retailers operating in the Middle East have already taken defensive action. Chalhoub, which manages hundreds of luxury fashion stores across the region, has shut outlets or continued operations with reduced staffing due to safety concerns, while Amazon has suspended fulfilment activities in Abu Dhabi and halted deliveries across much of the region. As conditions intensify, clothing retailers across the world are exploring alternative suppliers in UK, Europe, South Asia and Latin America to avoid being caught in the prolonged geopolitical disruption. Analysts say that shipping stoppages and fuel‑price shocks driven by the conflict are making Middle Eastern sourcing less reliable and more expensive, accelerating the need to look for alternatives.
Fashion supply chains, which remain dependent on oil‑derived materials such as polyester and on cost‑sensitive maritime shipping, are particularly exposed. A prolonged disruption at Hormuz would sharply increase manufacturing and logistics costs, lengthen delivery times and undermine just‑in‑time production models already weakened by the COVID pandemic and earlier Red Sea instability. As a result, retailers are stress‑testing scenarios that include relocating parts of their supply chains to regions with more stable shipping environments, even if production costs there are higher.
While fashion retailers grapple with geopolitical turmoil, UK grocers are doubling down on domestic agricultural resilience to reduce reliance on overseas trade. The convenience retailer, Co‑op, has long been a champion of UK agriculture, where they were the first national grocer to source 100% of their fresh and frozen meat from British farms, including when used as an ingredient, a commitment still in place alongside only selling British milk, cream and free‑range eggs.
As part of this support for British farming, Co-op established a £820,000 sustainability fund to support British farmers in reducing carbon emissions and improving nature stewardship across beef, lamb and dairy supply chains. The fund is channelled into helping farmers reduce fertiliser use, increase fuel efficiency and adopt renewable energy practices with participating farms receiving sustainability payments on top of standard product pricing. The scheme is expected to reduce carbon emissions by over 100,000 tonnes in five years.
These commitments reflect a strategic push to bolster UK food security amid climate volatility and global supply pressures. At a time of immense uncertainty, consumer-facing businesses are seeing that strengthening domestic supply chains is vital not only for environmental responsibility but also for long‑term national resilience. And communicators like ourselves, the importance of laying out these actions clearly to customers and investors and providing reassurance is critical.
Angharad Couch
Senior Director, CDR
