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When we last spoke with retailers in the latter half of 2025, they were finally beginning to put their lingering concerns around high costs behind them.
It had been five long years of delicately balancing growing their business with the high prices they needed to pay to do so. But it was time — they were ready to shift into growth mode.
Six months later, we checked back in. Now? Well, about that…
Those pesky cost concerns have come back in a big way. Not only are the most common challenges retailers face all related to high operating costs. But now, for the first time since we started this survey in late 2023, retailers say they are more focused on cutting costs rather than driving growth.
Upside conducts this twice-yearly pulse survey with retailers from the general population to get a sense of their biggest priorities and challenges. With nearly 10,000 responses across all six waves of this survey, we have a robust picture of their feelings — ones that, at the moment, are growing more pessimistic.
Read on for the full results.
First, a disclaimer: This survey was conducted in February, before IEEPA tariffs were repealed and before the war with Iran began. Changes in sentiments following those events will be captured in our next edition of this retailer pulse survey.
High costs are challenging retailers — with tariff concerns rising
Each survey, we ask retailers about their current financial shape and how they predict it’ll change in the next six months. On the whole, we haven’t seen much movement from wave to wave on these questions — people still report fairly strong health.
In both Q3 2025 and Q1 2026, a significant majority of retailers said their current financial picture is either excellent or good. Likewise, a significant majority expected things to get even better over the next six months. The only change this time around was that a slightly smaller percentage of retailers thought things would get much better in 2026.
We also ask retailers to share the biggest challenges facing their business right now. Cost concerns have long dominated the list — inflation, for example, has held the top spot as the most popular choice for all six waves now.
So on this front, cost concerns aren’t new. However, the specific types of concerns that retailers have are. The biggest story here is that tariff concerns are rapidly growing. They jumped from the fifth slot in retailers’ rankings all the way up the second slot, behind only inflation.
It’s worth calling out once more that this survey was conducted before the Supreme Court repealed President Trump’s “Liberation Day” tariffs. At the time of the survey, the effective tariff rate was nearly 17%, the highest levels we’ve seen in America since the Great Depression.
After the Supreme Court’s decision, the White House instituted new tariffs using different legal justification. The current effective tariff rate is just shy of 11%, which is lower than before but still substantial. We don’t expect that retailers feel significant relief from tariffs because of this change.
From driving growth to tightening the belt
In each of the previous five waves of this survey, retailers’ biggest priorities over the next six months revolved around driving growth — increasing customer loyalty, for example, or acquiring new customers.
This time, that changed.
For the first time, retailers said their biggest priority is tightening the belt, looking for ways to reduce their stubbornly high costs. That rose from the third-most popular priority last time around to the top slot in this survey. Another first: More retailers now say they are focused on adjusting prices down to incentivize customers than they are adjusting them up to maintain margin or cover their costs.
At the same time, those core growth levers — increasing loyalty, acquiring new customers, maintaining a successful omnichannel strategy, expanding footprint — all reached record lows.
That shift in priority also extends to marketing efforts. Across each of our primary retail categories — fuel, convenience, grocery, and restaurant — we’re seeing a decline in both traditional and digital advertising channels.
The biggest declines occurred in fuel and c-store digital channels; retailers in those fields said that, on average, they’ve dropped an entire channel over the past year.
Navigating high costs and growth goals
Of course, retailers have been navigating high costs for years. Efforts to bring costs down are well-intentioned — but too often, what starts as trimming the fat ends up making pre-existing pressures worse.
Upside helps fuel and food retailers offset high operating costs with new, profitable transactions. The personalized promotions in our marketplace change consumer behavior, winning more trips and greater spend for real bottom line impact.
Get in touch with our team of retail experts here.
