Russia’s war on Ukraine has brought new economic sanctions with every day that passes. The U.S. has been joined by many world leaders in condemning Russia’s actions by attempting to undermine the country financially to force them to withdraw. Many private corporations have joined this chorus and suspended operations in Russia. In addition, the country’s role in the world economy has meant these penalties are not occurring in a vacuum and American goods could feel the effect.

The pump is likely to be the place where consumers feel the economic impact of the Ukraine crisis first. Gas prices are rising every day and there is no clear resolution in sight. Inflation has contributed to the rise since last year, yet they pale in comparison to the cost increases we are seeing now. The U.S. has decided to halt the purchase of Russian oil which will only result in higher prices, while the release of domestic reserves is unlikely to bring it down by much.

Food, apparel, electronics, and other goods will not be immediately affected as the U.S. is not a major importer of Russian goods. Some stores like Kroger have already removed Russian made products from their shelves, yet these products make up only a small fraction of store shelves. Wheat is one of their main exports and the sanctions levied against them will directly affect nations who import. The U.S. would not be directly hurt by this; however, it will strain the global supply chain and put more pressure on other wheat suppliers. The higher demand will drive prices up and we could eventually see it reflected in some of our normal purchases. Furthermore, the cost of delivery of goods will increase and may be passed to consumers, which would increase prices for all goods. As the restrictions become more stringent and the length of the conflict grows, we are more likely to see the changes of the world economy on our grocery bills.

The stock market has reacted as expected to the conflict and the actions that followed. Many public companies took a hit and some like Darden are seeing their stocks fall. These disruptions can make Americans hesitant to spend money and that is where we could see the earliest impact on businesses. Restaurants and retailers are still recovering from the pandemic and have already had a tough time dealing with supply chain issue and inflation. Consumers could also limit their spending if they do not agree with the actions companies are taking in response to Russia. Many organizations have already suspended business with the country, yet foodservice companies find themselves in a difficult position. Major chains like Starbucks, McDonald’s, and YUM have up to hundreds of locations in Russia and shuttering operations there is no easy task. McDonald’s has temporarily closed all their stores in the country and Starbucks has suspended operations as well. McDonald’s corporate owns most of their Russian locations and Starbucks had to reach an agreement with their licensed partner to shutter stores. YUM is currently working with their franchisees to suspend operations. We will not see changes in U.S. stores due to these closures; however, a long-term shutdown of so many locations will affect the financial outlook for these franchises, and we could see ramifications later this year.

The crisis in Ukraine will continue to loom over the U.S. Every day new companies are speaking out in support of Ukraine and altering their operations. The operational changes will have short- and long-term consequences for consumers. Gas prices have already hit record highs and restaurant and grocery bills could follow. Consumers and businesses should brace for current trends to continue until a resolution is reached. It is important to note that suppliers will need to focus on their sourcing and delivery of finished goods as costs could rise. One solution is to find distributors and brokers which can maximize transportation costs where direct-to-chain outprices what buyers may be willing to purchase. In addition, it is always suggested that manufacturers maintain a diverse balance of clients from large chains to small/mid-sized companies to offset any disruption in the buying cycle.