Walmart Drops 9% After Falling Sales and Signs of Austerity Among US Consumers

Shares of US retail giant Walmart fell by nearly 9% following the announcement of disappointing domestic comparable sales results, raising serious concerns in the markets about the resilience of US consumer spending amid escalating economic pressures.

Data shows that US consumers are increasingly leaning toward austerity and preferring cheaper alternatives—a phenomenon known as trading down—benefiting discount store chains such as Dollar General and Dollar Tree, which attract broad segments of shoppers seeking lower prices.

In the same context, shares of discount retailer Ross Stores rose by 8% after beating second-quarter profit expectations, confirming that the shift in consumer behavior is favoring discount retailers over major retail chains.

Analysts view these combined indicators as a picture uniting inflation and declining purchasing power, as consumers suffer from rising prices at a time when their real income is declining, casting a shadow over US economic growth prospects in the second half of 2026.

What do these terms mean?

Comparable Sales: A metric comparing sales of stores open for more than a year to measure real sales growth apart from the impact of opening new branches. A decline means shoppers are buying less than they did last year.

Trading Down: Behavior where consumers choose cheaper products or stores than usual due to financial pressure, such as switching from a premium supermarket to a discount store to save on daily expenses.

Stagflation: An economic condition where high prices combine with slowing economic growth and elevated unemployment, presenting a tough mix because treating inflation typically deepens recession.