Their answer arrived over the past few days as Home Depot cut its forecast due to sliding sales as the home improvement boom appears to be waning. Additionally, Target, one of the biggest retailers, voiced concerns about "softening sales trends." 

Comparable sales from brick-and-mortar stores and digital channels operating for at least 12 months were flat for the three-month period that ended April 29 compared with the same quarter last year. That is lower than the previous quarter's 0.7% increase. 

Target executives told reporters that consumers are dialing back discretionary purchases and switching to staple goods as price rises and higher interest rates crimp household budgets. They said food and beverage, household essentials, and cosmetic sales were strong. 

The Minneapolis retailer beat Wall Street expectations and maintained annual profit guidance above industry analyst projections. However, warned about faltering consumers:

"We came into 2023 clear-eyed about what consumers are facing with persistent inflation and rising interest rates.

"We were determined to build on our guests' trust by unifying as one team to deliver affordable joy each and every day as consumers and businesses navigate a third straight year of dynamic challenges," Target chairman and CEO Brian Cornell told reporters. 

Target expects earnings in the current quarter to range from $1.30 to $1.70. Data from Bloomberg showed that it would trail the $1.91 average of analyst estimates. 

Its first-quarter net earnings slid 5.8% to $950 million because of increasing labor costs, inflation, and 'shrink' -- the loss of merchandise due to theft. 

"We continue to contend with a significant headwind caused by inventory shrink, building on a worsening trend that emerged last year," said Cornell.