Consumer sentiment hits record low, Walmart shoppers grow more price sensitive

Shoppers are walking into Walmart more guarded, and the pressure is showing up in the numbers behind consumer confidence. The University of Michigan’s consumer sentiment index fell to 44.8 in May, down from 48.2 earlier in the month, slipping just below the previous low set in June 2022.

The drop was driven in large part by fuel costs. AAA said the national average gas price stood at $4.529 on May 23, and gasoline prices had climbed more than 50% since the Iran war began. AAA and Associated Press reporting showed the price of regular gas had jumped 31 cents in the prior week alone, hitting an average of $4.48 a gallon on Tuesday. That kind of move lands hardest with households already stretched on basics.

That matters for Walmart because its customer base spans the income spectrum, but lower-income shoppers and people without a college degree posted the sharpest sentiment declines. Those households are also the most likely to feel each jump in gas, groceries and household staples. Joanne Hsu, who oversees the University of Michigan Surveys of Consumers, said 57% of consumers spontaneously mentioned that high prices were eroding their personal finances, up from 50% in April.

On the sales floor, the first signs often come before the receipts do. Shoppers start comparing unit prices more closely, reaching for smaller pack sizes, and swapping branded items for store brands. Nonessential items can sit longer in carts or be left behind entirely. Associates are also more likely to get questions about why a price changed, whether a sale is still active, or what the cheapest substitute is when an item is out of stock. That can turn quick interactions into longer ones at the shelf, at the register and in pickup.

Walmart’s own recent quarter showed strong sales and continued e-commerce momentum, but with a cautious outlook that fits the broader mood. The company has kept pulling in shoppers with low prices and faster delivery, but the latest sentiment reading suggests customers are not just hunting bargains, they are rationing spending. Independents and Republicans also posted lower readings, both at their weakest levels of the current presidential administration.

For associates, that usually means a floor full of more deliberate baskets and fewer impulse buys. For managers, it means more pressure to keep substitution decisions fast, price signage clear and checkout friction low. When households are this wary, Walmart’s low-price promise is not just a slogan, it is the main reason many shoppers keep coming back.