The retail sector faces a significant challenge due to declining consumer confidence. While one may think the effect is limited to small retail players, even the big names are struggling.
According to a Fortune report, decreased consumer confidence led to Walmart losing $22 billion in market valuation. This follows Walmart losing its position as the top quarterly revenue earner to Amazon in February 2025.
Highlights
- A Fortune report indicates that Walmart’s valuation declined by $22 billion.
- Declining consumer confidence, coupled with rising inflation and tariff issues, is cited as the cause of this loss.
- The share prices of the retail giant have also fallen by 3%, leading to a low market cap of $680 billion.
Walmart Battles Declining Consumer Confidence
Walmart CEO Doug McMillon believes consumers are experiencing financial pressure (Source: @dougmcmilloninstagram)
In a surprising development for the retail world, on March 25, Walmart’s valuation decreased amid a 12-year low in consumer confidence in the US. Against this backdrop, its CEO, Doug McMillon, had expressed his concerns about the budget-constrained and stressed consumers.
On March 25, the share prices of Walmart had fallen down by almost 3%, which resulted in its market cap dipping to $680 billion.
All of these figures are popping up in an uncertain economic situation where the US is facing inflation and tariff-related problems. As per the Conference Board, in the fourth consecutive month, the index of consumer confidence came down to 65.2. While the normal threshold is 80, this number hints towards recession.
Conference Board’s Stephanie Guichard added that “Consumers’ optimism about future income, which had held up quite strongly in the past few months, largely vanishes, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.”
McMillon had previously taken up the consumer confidence issue at a Chicago conference last month. He emphasized that “budget-pressured” consumers were demonstrating “stressed behaviors” and bringing down their expenses.
“You can see that money runs out before the month is gone, you can see that people are buying smaller pack sizes at the end of the month,” McMillon added.
Will Consumer Confidence Gain Momentum?
Consumer purchases are expected to dip further in the coming months (Source: Google Reviews)
Based on statements and data by consumer-behavior experts, the retail world is expected to bear the troubles regarding consumer confidence for some time now.
Kelly LaVigne, Vice President of Allianz Life, stated that inflation is currently impacting many Americans, and its effects on the cost of living will continue to compound over time. He emphasized that without a long-term strategy, inflation will keep reducing consumers’ purchasing power.
Reiterating the same, a survey by Allianz Life highlighted how 71% of customers think inflation will only worsen in one year from now. Additionally, 75% of them are worried about the effects of new tariffs on their living expenses.
However, Walmart’s McMillon said tariffs are something they have managed for many years and they can continue to manage.
The retail giant’s chief financial officer, John David Rainey, though, highlighted there were uncertainties related to consumer behavior and global economic and geopolitical conditions.
Walmart’s decreasing business figures demonstrate the bigger struggles of the retail vertical as consumer confidence reaches a new low. The declining purchasing power of users, along with inflation and tariff-related pressures persisting in nature, hint that the retail space will be full of challenges in the coming years.
This is hilarious and I’m certain it has more to do with the boycott of Walmart than consumer stress levels