Consumers Tighten Belts as Tariffs Bite: Retailers Reveal Shifting Spending Patterns

As of August 24th, 2025, consumers appear to be tightening their belts and shifting their spending patterns, according to insights shared by major retailers in recent earnings calls. Executives from big-box stores and furniture specialists have reported that shoppers are looking to "stretch their budget" and prioritize value, with discretionary item sales slipping as customers switch to alternative, more affordable products.

This cautious consumer behavior has had a mixed impact on the retail landscape. Discount chains like TJX Companies, the parent of TJ Maxx and HomeGoods, have seen a 4% year-over-year rise in comparable sales last quarter, as shoppers seek out deals. However, the demand for value has also contributed to softer cosmetic sales, according to Coty, the parent company of Covergirl.

In the home improvement sector, shoppers have been buying more appliances at stores like Home Depot and Lowe's, but remain wary of taking on debt for larger renovation projects. Executives have noted a slowdown in "larger discretionary projects, where customers typically use financing to fund the renovation."

Retailers are now carefully calibrating their approach to passing on the costs of tariffs to consumers, wary of hiking prices before their competitors do so. As the economic landscape continues to evolve, companies are closely monitoring consumer sentiment and adapting their strategies to cater to the shifting spending patterns.