Now that inflation has cooled a bit, are shoppers still clipping coupons and leaving gas stations with half-filled tanks? Investors will get a read on how Americans are spending when major retailers—including Walmart, Target and Home Depot—hand in quarterly results this week. Consumer sentiment declined over the last month despite inflation dipping for a second month in a row, according to the University of Michigan’s surveys of consumers. Hiring has stagnated, wages aren’t keeping up with the cost of living, and some worry inflation will accelerate as the war drags on and tariffs rise.
Walmart earlier this year said customers appear to be “navigating financial distress” based on changes in gas-buying behavior this spring. The chain reduced prices in response. Investors will look for indications that the strategy is working when Walmart hands in its numbers on Thursday. Other retailers are cutting prices to try to win over, and keep, inflation-weary customers. Target, which reports Wednesday, saw sales climb last quarter. But CFO Jim Lee said consumers’ downbeat mood could temper its growth. Consumer spending has been slowing, according to Census data: Retail sales fell 0.6% from June to July, down from a 0.2% bump in June and a roughly 1% increase in May. 5.
Investors should also get a feel for where people are focusing their spending, with companies specializing in everything from tractors to tennis shoes due to report. Quarterly results are expected from Home Depot, Lowe’s, John Deere & Co. and Amer Sports, the parent company of Arc’teryx and Salomon.
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