By Michelle Chapman
Retailers are trying to overcome economic uncertainty in 2025. Tariffs, inflation and prolonged fear of the recession have made many Americans uneasy and pulled back their spending.
Consumer spending accounts for around 70% of US economic activity, so a recession will increase the chances of contracting the US economy.
Once revenue from major retailers has ended, it has become clear that the trade war launched by the Trump administration is affecting retailers in very different ways.
Walmart has already raised prices last week and has won public responsibilities from President Donald Trump after saying that he must do so again when school shopping season begins again this summer. Trump told retail giants they should “eat” the additional costs generated by his tariffs.
Home Depot said Tuesday it doesn’t expect to raise prices due to tariffs, and it has spent years diversifying the source of products on its shelves. However, executive Billy Basteck said some products on Home Depot’s shelves could disappear. “The items we have can be influenced by tariffs that frankly we will not move forward,” Bastec said in a conference call with industry analysts.
Retailers organize how best to run in a trade war, but customers are in charge of finances and the trends are not good. As Americans are increasingly worried that President Donald Trump’s trade war will exacerbate inflation, US consumer sentiment fell slightly in May for five months as a remarkable economist.
The preliminary reading of the University of Michigan’s closely monitored consumer sentiment index, released Friday, fell 2.7% per month to 50.8, the second-lowest level in the nearly 75-year history of the survey. The only low reading was in June 2022. Since January, sentiment has fallen by nearly 30%.
Let’s take a quick look at some inspiring details from retailers reporting their quarterly financial results on Wednesday.
target
Target’s sales fell more than expected in the first quarter, and retailers warned that they would slip for everything in 2025 and all in 2025 as customers pull back spending in worry about tariffs and the economic impact.
Target also reduced its annual sales forecast. The company expects a 2025 single digit decline to fall after previously forecasting a 1% increase in sales.
Chairman and CEO Brian Cornell said during a Target conference call that the chain is dealing with multiple issues affecting the business, including tariffs and declining consumer trust.
“There are a lot of levers to mitigate the impact of tariffs, and prices are a last resort,” he said. “Our strategy is to maintain competitive prices by leveraging capabilities, long-standing relationships and scale that sets you apart from many retailers.”
TJX
TJX Cos, the parent of TJ Maxx, Marshalls and other stores. is pinned as one of the potential “winners” in the changing trade environment as Americans try to save money.
It seemed Wednesday as it beat both Wall Street revenue and profit expectations.
And CEO Ernie Herman said the second quarter was off to a strong start.
“We are confident that our incredible brands and wide assortment of fashion will be a huge draw for shoppers looking for value at compelling prices,” he said. Furthermore, we believe that the strength, flexibility and resilience of our off-price business model will serve us in today’s macro environment through our long and successful history. ”
TJX has maintained its forecast for 2026. This includes sales guidance for the integrated store to increase by 2% to 3%.
Lowes
Lowe’s first quarter sales fell slightly from $21.4 billion a year ago to $20.9 billion, which was better than the expected Wall Street. The U.S. housing market was sluggish.
Home Improvement Company reaffirmed its 2025 sales outlook in the range of $83.5 to $84.5 billion. Still, sales in the same store are expected to rise by 1%.
President and CEO Marvin Ellison said in a company conference call Wednesday that around 60% of Lowe purchases occurred in the US and about 20% of purchases are currently concentrated in China.
“We are pleased with this reduction in dependence, but we are not satisfied and are working to accelerate our diversification efforts,” he said of the company’s product procurement.
Ellison added that he expects Lowe’s prices to remain competitive.
Original issue: May 21, 2025 3:02 PM EDT
