U.S. consumers cut spending at retail in July 2026, with retail and food-service sales falling 0.6% from June. The decline comes as Walmart, Target and other retailers emphasize lower prices, promotions and faster delivery, showing how value and convenience are becoming more prominent factors in household purchasing decisions.
Key Takeaways
- U.S. retail and food-service sales totaled $763.6 billion in July 2026, down 0.6% from June but up 5.0% from July 2025.
- Walmart U.S. comparable sales rose 2.6% excluding fuel in its fiscal second quarter, while U.S. e-commerce sales increased 24%.
- Target reported second-quarter comparable sales growth of 3.8% and said it had lowered prices on more than 10,000 items over the previous year.
- The National Retail Federation found that 62% of back-to-school shoppers had started buying by early July, while 78% expected higher prices on school-related items.
- Separate consumer-spending measures remain stronger, underscoring that July’s retail decline does not represent a broad pullback across all household expenditures.
U.S. Consumers Cut Spending After a June Gain
U.S. consumers cut spending at retail in July after a modest increase the previous month, according to the Census Bureau’s August 14 release. Seasonally adjusted retail and food-service sales reached $763.6 billion, down 0.6% from June. Sales remained 5.0% above July 2025 levels, while sales from May through July were 6.3% higher than during the same period a year earlier.
The monthly drop followed a 0.2% increase in June retail and food-service sales. Because the Census Bureau figures are not adjusted for price changes, they measure the value of sales rather than changes in the volume of goods purchased.
Broader measures show a more mixed consumer picture. The Bureau of Economic Analysis reported that personal consumption expenditures, which include services as well as goods, increased 0.3% in June. Real consumer spending rose 0.4%, while disposable personal income increased 0.2%.
The personal saving rate was 2.7% in June, down from 3.0% in May. Those figures provide additional context for increasingly selective purchasing behavior as households balance recurring expenses with discretionary purchases.
The pattern also fits broader consumer spending patterns in which purchasing behavior can vary significantly by household finances and product category.
A separate measure from the National Retail Federation showed retail sales continuing to grow in July. The CNBC/NRF Retail Monitor excludes automobile dealers and gasoline stations and uses different data and methodology from the Census Bureau report, illustrating why the two measures can point in different directions during the same month.
Walmart and Target Put Value at the Center
Large retailers are responding to price-conscious shopping by making discounts and everyday pricing more visible.
Walmart said its U.S. business delivered more than 11,000 rollbacks during its fiscal second quarter of 2027. Walmart U.S. comparable sales increased 2.6% excluding fuel, while U.S. e-commerce sales grew 24%.
The retailer also reported a 40% increase in store-fulfilled delivery and more than 50% growth in marketplace net sales during the quarter. Those figures suggest that lower prices are being paired with digital access and faster fulfillment rather than treated as a stand-alone retail strategy.
Target reported a similar emphasis on value. The company said it had reduced prices on more than 10,000 frequently purchased products over the previous year. Its second-quarter net sales rose 5.3%, comparable sales increased 3.8% and comparable traffic rose 3.6%.
Those results do not mean every shopper is choosing the least expensive product. They do show that major retailers are giving price a prominent role alongside assortment, convenience and availability.
Photo Credit: Unsplash.com
The shift was also visible during large summer sales events, when shoppers showed greater attention to household necessities and lower-cost purchases. Earlier essential purchase trends around major promotional periods similarly highlighted retailers’ focus on price-sensitive demand.
Back-to-school shopping has provided another test. A July 14 National Retail Federation survey found that 62% of shoppers had already begun buying for the school year by early July. The figure was slightly below the 67% recorded at the same stage in 2025 but remained above the 55% reported in 2024.
“Shoppers are keeping value front and center as they look for ways to make their dollars go further,” NRF Chief Economist and Executive Director of Research Mark Mathews said in the release.
Separate NRF research found that 78% of back-to-school shoppers expected higher prices on school-related products. About one-third said they typically plan purchases around summer sales, while shoppers facing higher-than-expected prices indicated they could compare prices more closely or turn to discount stores.
Convenience Becomes Part of the Value Equation
Price is only one part of the competition for cautious shoppers. Walmart and Target’s latest results indicate that delivery speed and digital fulfillment are also becoming important components of how retailers present value.
Walmart reported that store-fulfilled delivery increased 40% in its second quarter. Target said comparable digital sales rose 8.7%, led by more than 25% growth in same-day delivery.
For consumers comparing similar products, the total purchasing decision can include the shelf price, available promotions, delivery costs, pickup options and how quickly an order can be received. Retailers are responding by combining pricing strategies with loyalty programs, broader online assortments and increasingly rapid fulfillment.
The July sales decline therefore presents a more nuanced picture than a broad retreat from shopping. Retail and food-service sales fell month over month, but remained higher than a year earlier. Walmart and Target also reported sales gains in their latest quarters, while digital channels continued expanding.
The strongest common thread is greater attention to value. Consumers continue spending, but retailers are competing more visibly on price, promotions and convenience to secure individual purchases.
For retailers, the environment places greater weight on how clearly value is communicated at the point of purchase. For shoppers, it can mean more comparison shopping, closer attention to promotions and greater use of delivery or pickup options when deciding where to spend.
U.S. consumers cut spending at retail in July, but the available data does not show spending disappearing across the economy. Instead, the combination of softer monthly retail sales, continued year-over-year growth and stronger value messaging from large chains points to a more selective retail environment in which consumers are weighing price and convenience more closely.
Frequently Asked Questions
Why did U.S. retail sales fall in July 2026?
Census Bureau data showed retail and food-service sales declined 0.6% from June to July 2026. The figures do not identify a single cause, and sales were still 5.0% higher than in July 2025.
Does the July decline mean consumers stopped spending?
No. U.S. consumers cut spending at retail on a month-over-month basis in July, but the Census Bureau still reported year-over-year growth. Separate BEA data also showed broader personal consumption expenditures rising in June.
How are Walmart and Target responding to value-focused shoppers?
Walmart reported more than 11,000 U.S. rollbacks in its fiscal second quarter, while Target said it had lowered prices on more than 10,000 frequently purchased items during the previous year. Both companies also reported growth in digital shopping and delivery services.
Are back-to-school shoppers becoming more price conscious?
NRF research found that 78% of back-to-school shoppers expected higher prices in 2026. About one-third typically planned purchases around summer sales, and some shoppers said they would compare prices or use discount stores when costs exceeded expectations.
