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.
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Consumers are only fixing what’s broken
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.
What does this mean for Home Depot? Basically, consumers are pulling from “wants” to focus on “needs,” spending mostly on survival maintenance. If an appliance breaks or a pipe bursts, shoppers will buy what they need to fix it. But major, elective home improvements are being put on hold.
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“What they tell us is there’s just so much uncertainty right now, you think inflation, interest rates, fuel prices, job concerns. They’re not yet ready to unleash that power of spending into large projects, but we know that the potential is there. At the same time, we don’t see anything we could point to that says there’s an inflection in demand,” McPhail said.
William Bastek, Home Depot’s executive vice president of Merchandising, confirmed this massive shift in shopping habits. Bastek noted that the company’s growth is coming “really core down the middle.”
“I think plumbing, electrical, hardware, tools, really had a great performance, both in-store and online,” Bastek said.
He noted that the company is “really pleased with the performance and I think the maintenance categories.”
However, outside of those essential emergency fixes, the business is feeling the weight of the consumer’s struggles.
“There’s some pressure related to some of the categories that we didn’t call out,” Bastek admitted.
Home Depot’s focus on prices and speed
To deal with this tough backdrop, Home Depot is shifting its strategy to keep customers coming through the door. Instead of relying on flashy sales or temporary discounts, the retailer is pulling back on promotions.
The goal is to keep everyday prices flat, even as costs rise behind the scenes.
Management used money from recent tariff refunds to swallow unexpected expenses rather than raising prices on shoppers.
“And our focus in merchandising has been to keep that value every single day. We’ve been less promotional. We’ve used some of the historical promotional activity to continue to make sure that every day, we can keep our prices where they are today, even with the significant impacts of what we’ve seen incrementally in the first half, we’ll do that into the back half of the year,” Bastek added.
Beyond price stability, the company is betting on convenience and speed to win over hesitant shoppers. Home Depot is also aggressively expanding its delivery options so customers can get what they need quickly.
“We’re seeing 65% of our parcel shipments are shipped same-day, next-day,” Bastek noted. He added that “55% of our big and bulky products are delivered within 2 days.”
Earlier this year, I reported on the retailer’s new real-time GPS delivery tracker for heavy building materials such as lumber, drywall, and concrete. Designed primarily for Pro contractors, the live tracking tool provides minute-by-minute updates to help job sites prepare for drop-offs and prevent costly downtime.
The company is also trying to get associates out from behind tasks so they can spend more time helping shoppers on the store floor. One example is Home Depot’s deployment of AI-powered phone agents to resolve routine customer calls four times faster, freeing up store associates to spend more time helping shoppers in person, as TheStreet previously reported.
Home Depot believes speed will be the ultimate traffic driver when consumers are pressed for time and money.
“Our goal here is delivery in 2 hours or less for a majority of the assortment in our stores, and we’re working to shrink that delivery window every day,” McPhail said.
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