Walmart warns US shoppers are cutting spending as higher gas prices bite

Walmart warns US shoppers are cutting spending as higher gas prices biteJust nowShareSaveAdd as preferred on GoogleArchie MitchellBusiness reporterGetty ImagesWalmart has warned higher gas prices are causing US consumers to cut spending elsewhere as the war with Iran continues to squeeze household budgets.The retail giant expects its sales growth between May and July to slow significantly from the previous three months, with higher prices at the pump to blame.The conflict in the Middle East has led to a surge in wholesale oil prices, in turn pushing up the price of gasoline for Americans.Data from motoring group AAA shows the average price of a gallon of gas has hit $4.56 (£3.40), up from $3 when the war began.In an interview with CNBC, Walmart finance boss John David Rainey said the rising cost of living had so far been offset by higher tax returns as a result of tax cuts in President Donald Trump's One Big Beautiful Bill Act (OBBBA).But he warned shoppers would be under increasing strain as that effect drains away in its current financial quarter."I think higher tax returns muted some of the pressure related to higher fuel prices and as we're in a period of time right now where those tax refunds are largely not coming in, I think consumers are going to feel more of that pressure from higher fuel prices," he said.The retailer was "keeping a close eye" on gas prices but expects them to remain high for the coming months, Rainey said.Walmart is the biggest private employer in the US and one of its biggest retailers, so its earnings offer an insight into how American consumers are being affected by the fallout from the Iran war.On a call with investors, Rainey also warned that if the closure of the Strait of Hormuz continues, it could force the retailer to hike food prices due to shortages of fertiliser, nitrogen and phosphates.'It's just ridiculous': Americans react to gas pricesUS inflation jumps to 3.8% as energy costs su...