Sales at the US retail giant Walmart grew at their slowest pace for more than six years in the most recent quarter, suggesting American shoppers are under strain.
Walmart, which due to its size is well-placed to gauge consumers’ mood, blamed the rising price of fuel.
Sales at comparable sites across the chain were up by 2.6%, excluding fuel, between May and July the company said.
Walmart said it would use up to $3bn of expected tariff refunds to lower prices in a bid to keep customers spending.
The rebate stems from duties the retailer paid after President Trump imposed a wave of tariffs on imported goods last year. Retailers are receiving refunds from central government after those tariffs were ruled unlawful.
Rival retailer Target recently said it had received $1bn in rebates, boosting its profits.
Walmart, the US’s largest retailer, said the nearly $3bn in tariff rebate it anticipated would help it continue a programme of price cuts or “rollbacks” that it expanded earlier this year, external.
Walmart has leaned heavily on price cuts to retain customers, launching 11,000 of its so-called “rollbacks” across categories.
Chief financial officer John David Rainey said those lower prices were already lifting transactions and unit sales, especially in food and other staples like toys.
But he acknowledged that the retail environment remained uneven, with lower-income households – a core part of Walmart’s base – feeling squeezed.
Rainey said rising petrol prices were leaving shoppers with less spare cash, saying the shift in behaviour became clear once fuel went above $4 a gallon.
Price moves in June made the impact obvious, he added, with lower-income customers pulling back and focusing spending on essentials.
Beyond the consumer pullback, Walmart’s results highlighted several additional risks that could shape the firm’s prospects in the months ahead.
Much of the quarter’s profit lift came from tariff refunds that had already come in, a one-off benefit that analysts say won’t recur to the same extent.
The price rollbacks could put pressure on margins, while Walmart is also spending money on automation, new warehouses, and tech upgrades.
On the earnings call, analysts pressed management on whether lower prices were already driving a lift in sales and whether some rollbacks could be locked in for 2027.
Walmart said the benefits were showing up most clearly in food and other staples, and that certain cuts might remain if they continued to resonate with shoppers.
“Our hope and intention always is that rollbacks can become permanent … wherever possible,” Rainey said.
Analysts also questioned whether Walmart’s income could continue to grow despite flagging sales. Executives said they believed it could, pointing to businesses such as membership and advertising.
