What’s News in Earnings: How Retailers Are Dealing With Price-Conscious Shoppers

Summary

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WSJ What’s News: How Retailers Are Dealing With Price-Conscious Shoppers

Date: March 20, 2026
Host: Alex Osola
Guest: Kelly Clunan (WSJ Reporter)

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Episode Overview

This episode of the WSJ’s “What’s News in Earnings” delves into the top themes from the most recent holiday quarter for U.S. retailers. Host Alex Osola and WSJ reporter Kelly Clunan analyze how sector leaders—ranging from Walmart and Amazon to discounters and department stores—are responding to persistent consumer anxiety over inflation, changing shopping habits, and global uncertainties such as tariffs and geopolitical conflict. The discussion highlights shifts in consumer behavior, operational innovations, and the ongoing battle for both low- and high-income shoppers.

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Key Discussion Points & Insights

1. Retailers Face Evolving E-Commerce Competition

• Amazon Surpasses Walmart by Revenue: This holiday quarter, Amazon became the country’s biggest company by revenue, overtaking Walmart—a milestone credited largely to Amazon’s continual shipping innovation.
• Same-Day and Next-Day Delivery as Competitive Edge:
  • Amazon is pushing the envelope with one-hour and three-hour delivery (01:30).
  • Target is expanding next-day delivery to 20 new metro areas to regain momentum after a period of sluggish sales.
  • Walmart has scaled up its same-day delivery services and invested heavily in logistical technology.
• Quote from John Furner, Walmart CEO:

  “The investments we've made in technology and supply chain help us deliver items even faster. They're paying off here in the US—customers using fast delivery…grew more than 60% for the year.”
  (02:06)

2. Leveraging Technology and AI

• Automation as a Cost-Saver: Retailers are automating more of their operations to not only quicken delivery but also contain labor costs.
• AI Shopping Assistants: Walmart rolled out an AI assistant named Sparky, which the company states has driven higher average order values.

3. Inflation, Tariffs, and Consumer Prices

• Inflation's Unyielding Grip: Despite generally sustained consumer spending, inflation is still squeezing wallets. However, retail executives have noticed price relief in certain categories.
• Case Study: Costco:
  • Has passed along savings to consumers in some staple categories (like eggs, cheese, coffee) due to easing inflation.
  • Is entangled in a legal battle to ensure tariff refunds would be returned directly to shoppers if/when granted due to a Supreme Court ruling on tariffs (03:10).
  • Remains unknown when or if such refunds might actually reduce consumer prices.
• Memorable Explanation:

  “Even as consumers seem to remain resilient…their wallets have definitely come under pressure as inflation just remains stubbornly high.”
  (02:46 – Kelly Clunan)

4. The ‘K-Shaped’ Economy: Winners and Losers in Retail

• Purchasing Power Diverges: Lower-income consumers continue to feel the brunt of inflation, trading down or becoming more value-oriented, while higher-income groups maintain spending.
• Discount and Off-Price Retailers Thrive:
  • TJX (TJ Maxx, Marshalls), Ross Stores, Burlington all post strong quarters, with Ross noting a growing, more diverse customer base.
  • Off-price retailers are capturing market share from traditional department stores.
• Department Stores Find Solidarity in Wealthier Clients:
  • Macy’s feels the benefit of a higher-income customer demographic, with strong results from its luxury Bloomingdale’s brand.
  • “Macy’s said its customers tend to have higher incomes…and have been more resilient than lower income shoppers, which helped boost sales at its Bloomingdale’s brand.” (03:54 – Kelly Clunan)

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Notable Quotes & Memorable Moments

• On E-Commerce Competition:

  “Amazon has been winning business…with its quick shipping options…To compete, a lot of retailers are really just looking to up their own delivery times.”
  (01:30 – Kelly Clunan)

• On Retail Tech Investments:

  “Walmart…has been working on its own AI shopping assistant called Sparky, which…has helped boost average order values.”
  (02:19 – Kelly Clunan)

• On Inflation’s Persistence:

  “Inflation has definitely been a major theme across the industry for a while now…even as consumers seem to remain resilient and continue spending, their wallets have definitely come under pressure.”
  (02:46 – Kelly Clunan)

• On the K-Shaped Economy:

  “Off-price retailers in general are, are gaining market share from more mainstream retailers, including department stores.”
  (03:54 – Kelly Clunan)

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Timestamps for Key Segments

• 00:18 — Episode intro and main theme (earnings season, spending trends)
• 01:16 — Introduction of guest Kelly Clunan
• 01:30 — E-commerce innovations: Amazon, Target, Walmart
• 02:06 — Walmart CEO John Furner on technology and delivery growth
• 02:19 — Walmart’s automation, AI assistant, and cost savings
• 02:46 — Effects of inflation and tariffs on consumer prices (Costco focus)
• 03:54 — The K-shaped retail economy: discounters and department stores
• 04:55 — Wrap-up and end of content

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Conclusion

This brief, content-rich episode provides a sharp snapshot of how leading U.S. retailers are navigating a landscape defined by stubborn inflation, shifting consumer stratification, and digital transformation. With off-price chains and e-commerce continuing to disrupt traditional stalwarts, and new technologies promising both efficiency and higher revenue, the pressure is on for every retailer to meet the demands of a price-conscious—yet still resilient—American shopper.

Transcript

[A]

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[B]

Hey listeners, it's Friday, March 20th. I'm Alex Osola for the Wall Street Journal and this is what's news in earnings, Our look at some of the biggest themes standing out this earnings season. The holiday quarter is the most important time of year for us ret, and despite worries about inflation and the job market, consumer spending largely held up. We'll look at a range of retailers to see patterns in how Americans are spending, from Walmart to discounters to Macy's, one of the last traditional department stores, which just reported surprisingly strong results. Some companies are navigating changes in consumer shopping habits better than others, but many of them face the same uncertainties. There's government policy on tariffs that keeps changing, which affects their costs. And the Iran war is threatening to send inflation even higher higher. Joining me to break down what all this means for the retail industry is WSJ reporter Kelly Cloonan. Welcome Kelly.

[C]

Thanks for having me.

[B]

Kelly. Walmart posted strong sales growth in its most recent quarter, but it also lost its crown as the country's largest company by revenue to Amazon. How are Walmart and other retailers trying to keep up in the E commerce space?

[C]

Yeah, totally. For quite a while now, Amazon has been winning business from other retailers with its quick shipping options. This week it even said that it's rolling out one hour and three hour delivery services across the US So to compete, I think a lot of retailers are really just looking to up their own delivery times. Target, which has been struggling with sluggish sales for several years now, said earlier this month that it plans to launch next day delivery in more than 20 new metro areas. And then Walmart has also been expanding its own same day delivery service in recent years.

[B]

Right? Walmart CEO John Furner mentioned the growth of its fast delivery option in Walmart's latest earnings call.

[D]

The investments we've made in technology and supply chain help us deliver items even faster. They're paying off here in the US customers using fast delivery and that's delivery in under three hours grew more than 60% for the year.

[C]

You just heard Walmart talk a little bit about the investments that they've made in technology and in automation. And it's also said that those efforts have helped to cut down on labor costs. And Walmart also has been working on its Own AI shopping assistant called Sparky, which it said has helped boost average order values.

[B]

Shifting a little bit. Gas prices have been soaring because of the war in the Middle east, but even before that, people were pretty worried about inflation. What do the stores have to say?

[C]

Yeah, inflation has definitely been a major theme across the industry for a while now. And even as consumers seem to remain resilient and continue spending, their wallets have definitely come under pressure as inflation just remains stubbornly high. Some retailers have noted though that inflation for some products has come down recently, which has helped lower prices a bit. Costco, for example, said it it has already lowered the cost of some products like eggs, cheese, coffee because of lower inflation for those things. It's also said that if it gets tariff refunds after the Supreme Court struck down Trump's tariffs last month that it would then pass on those lower prices to shoppers. I think Costco is a really interesting case because it also, you know, got sued by a customer who won refunds on on items because of the tariffs. The lawsuit basically wants to force Costco to pass along any refunds it might get from the government to customers. But it really is still a huge question mark of when or if any of these companies will get refunds from the government and how that would flow through in the form of lower prices or refunds to customers.

[B]

So Kelly, we know people are worried about prices. They have been for a while. What kinds of retailers are benefiting from that?

[C]

Yeah, a lot of stores have been talking about this kind of K shaped economy where lower income consumers are having a harder time, they're sort of trading down or remain on the hunt for value, while higher income shoppers generally seem to be doing pretty well and they continue to spend. That dynamic means a couple of things. For one, off price retailers like tjx, which owns TJ Maxx and Marshalls, Ross stores and Burlington all had pretty solid quarters as people looked for value. Ross said that its customer base has grown, adding new shoppers from a range of income levels and ages. And its CEO even said that off price retailers in general are, are gaining market share for more mainstream retailers, including department stores. At the same time, other retailers have have really put into strength from higher income consumers, including Macy's, which reported earnings earlier this week. Macy's said its customers tend to have higher incomes and you know, generally have been more resilient than lower income shoppers, which helped boost sales at its Bloomingdale's brand, which, you know, tends to have more luxury products.

[B]

That was Wall Street Journal reporter Kelly Clunan Kelly, thanks so much for joining us.

[C]

Thanks for having me.

[B]

And that was what's News in Earnings. Today's show is produced by PR Biennime with supervising producer Tali Arbel. Additional sound courtesy of S and P Global Market Intelligence. Later today we'll have the PM edition of what's News out for you as usual, and we'll be back with you next earnings season, looking at more reports from major US Companies. Until then, I'm Alex Osila. Have a great day.

[E]

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