Walmart has issued a warning that American consumers are increasingly tightening their budgets as surging fuel prices place significant strain on household finances. The retail giant anticipates a notable deceleration in sales growth for the period between May and July, attributing the shift directly to the rising costs at the pump driven by global oil market volatility.

John David Rainey, the company’s finance chief, noted that while tax refunds had previously provided a buffer for shoppers, that temporary relief is now fading. As these financial cushions disappear, the full impact of elevated energy costs is expected to weigh more heavily on consumer behavior. The retailer is closely monitoring the situation, though it expects fuel prices to remain high for the foreseeable future.

Beyond immediate retail trends, the company expressed concerns regarding broader supply chain stability. If geopolitical tensions continue to disrupt key shipping routes, the retailer warned that it may be forced to increase food prices due to potential shortages of essential agricultural inputs like fertilizer, nitrogen, and phosphates.

Despite reporting a strong first quarter with profits reaching $5.3 billion and sales climbing to $177.8 billion, the company’s outlook for the coming months remains cautious. Following the announcement of a projected growth slowdown to between 4% and 5%, the company’s shares experienced a 7% decline in early trading.