US households could be in for a second wave of Iran war inflation that hits more than just gas

Grocery shopping is set to get more expensive due to both the food itself and the packaging.

“Virtually everything in that cart arrives in plastic packaging. Think bottles, bags, trays, wraps, pouches, lids,” Malek said, adding, “Polymer prices for the resins used in food packaging moved sharply higher in March and are expected to keep climbing through mid-year.”

The strategist projected a conservative pass through rate of 4% due to increased plastic prices caused by petrochemical disruptions alone.

Goldman estimated a 3% increase in cost of goods sold for food and a 4% rise for beverages which will take three to nine months to feed through. This projection also only accounts for the impact of the chemicals, not raw materials, logistics and transport, energy, and other costs.

Beyond plastic, aluminum has also seen prices surge as the war disrupts supplies making foods and beverages packaged in cans more expensive.

The war is also expected to fuel inflation in food prices due to disruptions to the fertilizer supply chain due to the blockage in the Strait of Hormuz. This food inflation shock will also be delayed since it’s impacting the spring planting season which is underway now.

Personal care and household products are set to see a larger impact than food and beverages since they’re all packaged in plastic containers.

Malek expects a 3% to 4% increase to personal care products as well as other household supplies that come in plastic packaging, like laundry detergent, cleaning products, and paper towels.

Products made of plastic with few alternative like trash bags will see the sharpest hike the strategist said.

Goldman calculated a 18% increase in cost of goods sold that will hit in the next three to nine months for personal care items.

Some products could see price hikes sooner as companies get ahead of increased costs.

For example, Unilever, the company behind brands like Dove and Vaseline, told investors it plans to do small price increases often to remain competitive as manufacturing costs rise.

Pharmacy and healthcare spending are exposed on multiple fronts to the inflationary pressures of the war in Iran.

“The adhesives in bandages, the coatings on pills, the plastic in blister packs, the bottles that hold every prescription in America: all petrochemical,” Malek laid out.

Not only are prescription medications packaged in plastic, some of the materials themselves that go into pharmaceutical drugs are affected.

The global pharmaceutical trade has been hurt by the war time disruption to commercial shipping, especially since many drugs and pharmaceutical inputs have short shelves lives meaning shipping delays compromise quality.

The increased costs of prescriptions compound healthcare inflation already weighing on consumers.

Shopping will be more expensive as the clothing industry adapts to the war in Iran.

Roughly 60% of all clothing is made from petroleum derived synthetic materials like polyester, nylon, and acrylic, according to the UN, which have been disrupted by the oil shock.

Goldman estimated a 15% jump in cost of goods sold for clothing which will hit retail prices in the next three to six months.

Shoes are even more reliant on petrochemicals than clothes.

Around 70% of materials in a synthetic shoe are petrochemical-based and approximately 30% of those material costs are directly tied to oil prices, analysis from the Footwear Distributors and Retailers of America.

These price hikes could come at an especially inopportune time for consumers during the back to school shopping season.