Home Depot issues dire warning about squeezed American shoppers

If you get that anxious feeling in your gut anytime you need to pull your wallet or swipe your card, you are not alone. One of the biggest retailers in the country highlighted this pressure among shoppers.

Home Depot has battled a worrisome consumer trend for a while now. The major issue, highlighted many times in the retailer's filings and earnings reports, is the fact that squeezed consumers have cut their discretionary spending.

This trend is highlighted across the broader retail industry, with consumers signaling plans to "pull back across a broad range of discretionary purchases," a recent McKinsey consumer survey confirmed.

The retailer's foot traffic data, provided by Placer.ai , aligns with the trend, revealing that average visits per Home Depot location dropped 0.6% year over year, steeper than the 0.4% decrease its top rival, Lowe's, saw, according to TheStreet's Patricia Battle.

Battle further highlighted that Home Depot saw a drop in big-ticket sales as high mortgage rates keep the housing market frozen. Consumers are avoiding large home improvement projects due to economic uncertainty, prompting Home Depot to focus on faster delivery and improved customer service to boost sales.

At the recent Goldman Sachs Global Consumer and Retail Conference, Home Depot management painted a stark picture of the American shopper.

Consumers are 'pressured' with no end in sight: Home Depot CFO

Home Depot management highlighted that consumers remain under severe financial pressure, resulting in a shift away from large discretionary projects and toward basic, essential home maintenance.

To combat this consumer fatigue, the company is holding prices steady by pulling back on promotions and aggressively expanding its fast-delivery options to win over cautious shoppers.

Home Depot CFO Richard McPhail emphasized that this isn't a new problem, but a worsening one, with no relief in sight.

"When you look at the broader macro, it's really hard to see any points of inflection in the stats that we look at. The consumer has become more pressured over time over the last 6 quarters," McPhail said .

When consumers tighten their wallets amid a challenging economic environment, they don't stop spending entirely but do change the way they spend.

When it comes to spending for the house, the discretionary spending pullback is severe. "Net intent was lowest for home decor (–32 percent), followed by accessories (–30 percent) and furniture (–29 percent)," according to the McKinsey & Company consumer sentiment report , updated in August 2026.