Walmart says it may channel tariff refunds into lowering prices for customers as company executives warn that many shoppers are increasingly struggling with rising fuel costs.
Speaking during an earnings call on Thursday, Walmart Chief Financial Officer John David Rainey said the retail giant has started noticing signs of financial strain among lower-income consumers.
According to him, customers visiting Walmart gas stations have recently begun purchasing less fuel, with many filling up fewer than ten gallons for the first time since 2022.
“That’s an indication of stress,” Rainey said.
He explained that spending habits now differ sharply between wealthier and lower-income consumers.
“We see with our customers that the high-income customer is spending with confidence,” Rainey added. “While the lower-income consumer is more budget-conscious and perhaps navigating financial distress.”
The comments come after the U.S. government began refunding tariff payments to companies that had previously paid higher import duties introduced under President Donald Trump, before most of the tariffs were overturned by the Supreme Court.
Walmart is now among the biggest retailers, suggesting that the refunds could be used to reduce prices in stores.
“We think that the single best return that we can have on a dollar of capital right now is to invest in the customer, invest in price,” Rainey said.
The company noted that its stores and fuel stations have continued attracting bargain-hunting shoppers, helping U.S. sales grow by 4.1 percent between February and April.
Retailers across the United States say consumers are still spending, partly supported by larger tax refunds this year. Companies including Home Depot, Target, and Lowe’s also reported sales growth in recent earnings updates.
Federal data released recently showed retail and online spending rose 5.2 percent in April compared to the same period last year, outpacing inflation.
However, fuel prices remain a major concern for retailers and consumers alike. The ongoing U.S. conflict with Iran has disrupted shipping through the Strait of Hormuz, a key route for global fuel and fertilizer supplies.
As a result, energy costs have continued climbing, contributing heavily to inflation. According to AAA, the average price of regular gasoline in the United States reached $4.56 per gallon on Thursday, up $1.38 from a year ago.
Walmart executives warned that if fuel prices remain elevated, consumers could eventually see higher prices across stores as transportation and shipping expenses continue to rise.
The company also disclosed that higher fuel costs significantly affected its earnings, while Home Depot executives said their own tariff refunds could help offset increasing transportation expenses.
