BENTONVILLE, Ark. (AP) — Walmart posted second-quarter results that topped Wall Street estimates Thursday even as the retailer said gasoline prices above $4 a gallon are prompting many shoppers to make trade-offs, a development that is squeezing household budgets and slowing U.S. sales growth.
The world’s largest retailer reported revenue of $187.9 billion, up 5.9% from a year earlier, and adjusted earnings of 81 cents per share. Both figures beat analyst forecasts. U.S. comparable sales, excluding fuel, rose 2.6%, the slowest pace in more than a year and below expectations.
Chief Financial Officer John David Rainey told analysts that when fuel prices climb above $4, “perhaps there’s a psychological impact.” Shoppers, he said, “are making trade-offs.” Walmart also faces a roughly $2 billion increase in fuel-related costs compared with earlier forecasts.
The comments come as families already watching grocery and transportation spending feel the pinch. National average regular gasoline recently hovered near $4.10 a gallon. Lower-income households have been especially cautious, Walmart said, even as higher-income customers continue to shop the stores. A new Medicare-related cap on certain drug prices also reduced pharmacy sales by 125 basis points.
Walmart’s results underscore a familiar pattern for households trying to stretch every dollar: when gas stays above $4, discretionary purchases and even some grocery trips get delayed. According to the U.S. Department of Agriculture’s Economic Research Service, households facing higher prices often buy less food, limit discretionary items or switch to less expensive alternatives.
What Consumers Can Do
Walmart is responding by pouring money back into lower prices. The company received nearly $2.9 billion in tariff refunds and used much of it for more than 11,000 price rollbacks during the quarter. Executives said they will continue prioritizing those refunds for price investments rather than holding the savings. Shoppers can act on that immediately by checking weekly rollback prices, signing up for rewards programs, using pickup or delivery to cut extra trips to the pump, and comparing store-brand unit to name brand prices on pantry staples.
Shoppers also turn to a second set of tactics beyond weekly rollbacks and store brands. Many batch-cook meat, soup and other staples and freeze or otherwise preserve what they cannot use immediately. Cooking at home, buying bulk rice and beans, purchasing near-date meat, vacuum-sealing food for longer storage, and seeking farm produce in volume are among the methods households use to cut costs. Some also work with a local butcher and shift more of their shopping to warehouse clubs such as Costco or Sam’s Club.
Editors Disclosure: AI was used in the initial drafting of this posting. All facts were checked by a human. The opinions are those of the author.
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