From groceries to lipstick: seven companies test the consumer

Key takeaways

• Walmart, Target and TJX can show whether shoppers are cutting back or simply becoming more selective.

• Home Depot and Klarna test appetite for larger purchases when confidence and borrowing costs still matter.

• Carlsberg and Estée Lauder show whether small indulgences remain resilient across different markets.

US retail sales fell 0.6% in July, while consumer sentiment weakened again in early August. That sounds gloomy, but economy-wide data hides an important distinction. Households rarely stop spending everywhere at once. They change what they buy, where they buy it and how they pay.

This week offers an unusually broad test. Home Depot and Klarna report on 18 August. Target, TJX, Carlsberg and Estée Lauder follow on 19 August, with Walmart on 20 August. Together, they cover everything from groceries and discounted clothing to renovations, credit, beer and beauty.

The basket matters more than the bill

Walmart, Target and TJX provide the cleanest comparison. Walmart is heavily exposed to groceries and essentials. Target sells more discretionary goods such as clothing and homewares. TJX specialises in off-price retail, selling branded products at discounts.

Strong Walmart and TJX results alongside softer Target sales would suggest consumers are still spending, but leaning harder towards value. If Target also improves, the signal becomes broader: households may be comfortable enough to move beyond necessities again.

For investors, the useful clues are traffic, product mix, promotions and guidance rather than one headline sales figure. Strong sales bought with heavy discounting tell a different story from customers arriving willingly and paying close to full price.

Big purchases need confidence

Home Depot tests a more expensive part of the wallet. Home repairs cannot always wait, but kitchens, bathrooms and other large renovation projects often can. Its previous quarter showed only modest underlying sales growth, so larger projects remain the more revealing signal.

Klarna adds the financing angle. The digital bank lets shoppers spread payments over time. It entered this quarter with rapid growth and relatively stable credit losses. Rising payment volumes with steady repayment behaviour would suggest healthy usage. Faster borrowing paired with worsening credit performance would be much less comforting.

Small luxuries can travel further

Carlsberg and Estée Lauder broaden the test beyond US retail. Carlsberg’s first quarter showed growth in premium beer, alcohol-free drinks and soft drinks. Estée Lauder has been recovering in prestige beauty, including better momentum in mainland China.

They test a familiar habit: people may postpone a sofa before abandoning every small pleasure. If premium drinks and beauty hold up while larger purchases soften, the consumer is not disappearing. The consumer is prioritising.

Risks: one week is not an economy

Weather, promotions, calendar shifts and company execution can distort one quarter. July’s weak US retail-sales report was also affected by Amazon moving Prime Day into June. The better approach is to look for patterns across companies, especially whether value-seeking, delayed big purchases and stable credit quality appear together.

The consumer is not one person

This week matters because it turns a vague debate about “the consumer” into something more useful. Walmart can test essentials, TJX the hunt for value, Target discretionary recovery and Home Depot bigger commitments. Klarna shows how much spending needs financing, while Carlsberg and Estée Lauder reveal whether small indulgences still travel.

The message will probably be more nuanced than strong or weak. Households can feel cautious and still spend when something feels necessary, affordable or worth it. That is the receipt investors should read. The total matters, but what sits inside the basket tells the better story.