Walmart warns US shoppers feel squeeze as sales growth slows

Walmart on Thursday reported its slowest quarterly comparable sales growth in six years and warned shoppers were probably being squeezed by high fuel prices, stoking concerns that pressure on US consumers is mounting.

The retailer raised its annual sales and profit forecasts and said aggressive price cuts would boost demand later this year, but investors were unconvinced.

Shares fell as much as 10% to a nine-month low of $102.85 — its biggest single-day drop since May 2022 — and were on track for a nearly $90bn loss in market value if losses hold.

The retailer, the world’s biggest by revenue, is known for its low prices on grocery and essentials, which has helped Walmart stay well ahead of competition. But price rollbacks on 11,000 products, announced on Wednesday, will be fuelled in part by $2.9bn in tariff refunds — a one-off boon and a strategy also being deployed by rivals, including Target.

“For the consumer economy, this is like Nvidia posting a slowdown,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. “Walmart has been winning the trade-down trade, but that tailwind may be fading.”

There are other signs pointing to softening demand. US retail sales fell unexpectedly in July, while petrol prices have remained elevated for months.

US President Donald Trump last week warned consumers that fuel prices could remain high as the war in Iran drags on.

Shares of retailers, including grocers Kroger and Albertsons, fell after Walmart’s results.

Walmart now expects an additional $2bn in fuel costs above prior forecasts.

“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.

Store traffic growth slowed to 1.5% in the latest three months from 3% in the first quarter.

Walmart executives urged patience, arguing that benefits from lower prices, particularly in grocery and general merchandise, will take time to materialise.

Rainey said Wall Street should view the company’s second- and third-quarter results as a single unit, while CEO John Furner said an increase in unit sales would translate to share gains over time.

Economic low points are the moments Walmart’s business model is designed to win, and some analysts and investors believe the retailer is still best positioned to win a price war.