Walmart says it has to raise prices, and that customers are tapping out
Both low- and high-income customers are spending more carefully as consumer confidence falls on war news and rising energy costs
The country’s largest retailer used a recent earnings call to deliver an unusually blunt warning: it will lift shelf prices in the second quarter and through the second half of 2026 to offset war-driven costs.
Walmart absorbed $175 million in unanticipated fuel expense during its most recent quarter, even as revenue climbed 7.3 percent to $177.8 billion and U.S. same-store sales rose 4.1 percent, NBC News reported.
Chief Financial Officer John David Rainey said the average number of gallons customers pump at Walmart fuel stations had fallen below 10 per visit for the first time since 2022, The Wall Street Journal noted. “This reflects a sign of strain,” Mr. Rainey said. He told NBC that lower-income customers “are spending with intent” while higher-income shoppers continue to trade down to budget brands and “perhaps navigating financial distress.”
AAA put the national average for regular gasoline at $4.56 a gallon Thursday, up from $2.98 before the conflict, and diesel at $5.66 a gallon, up about $2 since the war began. Consumer prices climbed 3.8 percent in April, outpacing wage growth for the first time since 2023.
No surprise: Consumer confidence is down
It’s hardly surprising that consumer confidence is sinking. A monthly survey from The Conference Board said its consumer confidence index fell to 93.1 in May from an upwardly revised 93.8 in April. Economists polled by The Wall Street Journal had expected a reading of 92.0.
Among age groups, confidence ticked up for consumers aged 35-54, but trended downward for older and younger consumers.
Consumers’ assessment of business and labor-market conditions retreated by 3.2 points to 121.2 in May. The expectations index, based on short-term outlook for income, business, and labor market conditions rose by one point to 74.4.
What does that mean?
When economists say “consumer confidence” is down, they mean Americans are feeling more pessimistic about their personal finances and the economy overall. That may sound abstract, but it can have very real effects on household budgets, jobs, borrowing costs and prices.
At the individual level, falling consumer confidence often changes behavior before anything else changes. People tend to delay large purchases, reduce discretionary spending and build savings cushions because they are worried about what might happen next.
That matters because consumer spending drives roughly two-thirds of the U.S. economy. If millions of households cut back at once, businesses notice quickly.
Employers may become more cautious, hiring fewer workers and delaying expansion plans. This does not necessarily mean a recession is imminent, but declining confidence is often treated as an early warning sign.
A troubling pattern in recent years is that many households continue spending even when confidence falls — often by relying more heavily on credit cards or buy-now-pay-later financing.
What can you do?
Financial advisers commonly recommend:
Reducing high-interest debt
Building emergency savings
Avoiding large unnecessary purchases
Comparing insurance and service costs
Locking in budgets before prices rise further
Being cautious about variable-rate debt
In many ways, falling consumer confidence reflects a broader consumer mood: households are increasingly worried that their incomes are not keeping pace with the cost of living. That anxiety alone can slow economic activity — even before any formal downturn begins.