retail

Walmart sales are slumping as US consumer spending pulls back, with the economic impact of tariffs and the United States’ tensions with Iran weighing on consumers, the big-box retailer’s most recent earnings report shows.

US same-store sales rose 2.6 percent in the second quarter, according to the company’s earnings released on Thursday, falling short of the 3.8 percent forecast by analysts at LSEG. That marked the slowest quarterly increase in six years.

The Bentonville, Arkansas-based retailer said heightened petrol prices are to blame for the slowdown in spending.

“When fuel prices increase and get above $4, perhaps there’s a psychological impact to that … consumers are making trade-offs,” CFO John David Rainey said on a call with analysts on Thursday.

Prices are continuing to jump. The average price for a gallon (3.78 litres) of petrol rose to $4.10 on Thursday, up from $4.07 a week ago, according to the American Automobile Association, which tracks daily petrol prices. By comparison, the average price was $2.98 when the US and Israel first struck Iran.

The big-box retailer also said it expected $2bn in incremental fuel-related costs above its original guidance.

Sales dropped in Walmart’s US pharmacy business and also dipped elsewhere. Overall, quarterly revenue rose 3.4 percent, the slowest pace since the first quarter of fiscal 2023.

Consumers are spending more in the checkout line — 1.1 percent higher than the previous quarter — but it is still well below the 3.1 percent jump this time last year.

That comes as consumer inflation ticked up last month by 0.1 percent from the month prior and 3.4 percent from this time last year, according to the US Labor Department’s Bureau of Labor Statistics (BLS).

The price of fresh fruit jumped 2.2 percent from a month ago, butter by 0.8 percent, and fresh fish by 1 percent, according to the BLS report.

This as overall retail sales dipped in July, dropping 0.6 percent, marking the biggest decrease since May 2025, according to the US Commerce Department data released last week.

Walmart also announced price cuts on Wednesday on 11,000 items, to be fuelled in part by the $2.9bn in tariff refunds it has received – a one-time boon – and a strategy also being deployed by rivals including Target.

Walmart said, however, that price changes took effect in July, so the effects might be more apparent in the company’s next earnings report.

“You don’t necessarily expect to have that offsetting benefit to the lower prices in the immediate period,” Rainey said.

However, fewer consumers are venturing into brick-and-mortar stores, with foot traffic increasing by 1.5 percent for the quarter, a drop from 3 percent in the previous quarter. However, Walmart’s e-commerce sales are on the upswing, with sales jumping 24 percent in the US.

As a result, Walmart upgraded its forecast for net sales growth, from 3.5–4.5 percent to 4–5 percent.

But that is limited because in-store sales are still the company’s premier offering.

“The bread and butter of the company is still in-store and in-person shopping,” Melius Research analyst Jacob Aiken-Phillips told the Reuters News Agency.

Mixed big-box earnings

Other big-box retailers also reported earnings in the last couple of days, with a pullback in consumer spending being an undertone. TJX, the parent company of TJ Maxx and Marshalls, reported sales growth of 1 percent for the quarter, a slowdown from 6 percent the quarter before.

“Our fear is that it relates to lower ticket [less purchases per shopping trip] given wider signs of consumer weakness and price increases over the last year-and-a-half,” William Blair analyst Dylan Carden told Reuters.

That comes alongside earnings from Target, one of Walmart’s closest competitors. On Wednesday, the Minneapolis, Minnesota-based big-box retailer reported net sales jumping 5.3 percent for the quarter compared to this time last year, at $26.5bn.

That was driven by a 3.6 percent rise in in-store traffic. The company has also cut prices over the last year on more than 10,000 items and received a $1bn tariff refund.

On Wall Street, Walmart is taking a hit on the heels of its earnings report, with shares down by 9.6 percent since the market opened. Other big-box retailers are lower, but not showing nearly as stark a drop. TJX stock was down 1.7 percent, and Target was down by 0.1 percent.

Aug. 14 (UPI) — The U.S. Department of Commerce said Friday that retail sales dropped 0.6% in July from June, the largest decline since May 2025.

The department’s figures, which are adjusted for seasonal swings but not for inflation, revealed retail sales were down from June’s 0.2% gain and fell far short of the 0.1% gain that economists had forecasted in a FactSet poll.

However, retail sales have increased by 5% over the past year, exceeding the long-term average.

Some analysts attributed a portion of July’s dip to the annual Amazon Prime sale, which normally takes place in July, but was held in June this year. Internet sales, the second-largest category of retail sales after automotive, were down 2.3% in July.

Figures for the past year show online sales are overall up 8%.

Auto sales were down 1.8% in June.

The Commerce Department report showed sales at bars and restaurants actually went up in July, with a .5% increase over the previous month.

Data from the U.S. Bureau of Labor Statistics earlier revealed 23,000 jobs were cut by employers in July. The unemployment rate was measured at 4.1%, down from 4.2% in June.

July 16 (UPI) — U.S. retail spending was weaker than expected while tourists from around the world came to the country for the World Cup.

Retail sales rose 0.2% in June from a revised 1% in May, and up 6.7% from June 2025, the U.S. Census Bureau said Thursday. Expectations from the data firm FactSet were at 0.3%.

The World Cup and Amazon‘s Prime Day helped boost spending, but lower gas prices slowed the rise. Excluding gas sales, June spending rose 0.7% after 0.9% in May.

A measure of retail spending that removes sales of building materials and gasoline rose 0.5% in June, which is down from 0.8% in May, but slightly higher than the expected 0.4% increase, CNN reported. It shows consumer demand continued steadily in June.

Strong economic growth along with rising inflation means that the Federal Reserve is less likely to lower interest rates. For the Fed to cut rates, inflation would need to slow to toward the 2% annual target or signs of a slowing economy, CNN said.

“Despite challenges, consumers are still spending and the labor market shows no signs of cracking,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, wrote Thursday.

“This type of data won’t move the Fed’s needle either way, but it underscores the ongoing resilience of the U.S. economy.”

Another economist said the second half of the year’s economy could slow even more.

“A renewed slowdown in spending, however, beckons over the second half of this year,” Oliver Allen, senior economist at Pantheon Macroeconomics, wrote in an analyst note Thursday.

“The lift to cashflow from tax refunds now has faded, leaving consumers far more exposed to the real income shock from the jump in gas prices.”