It’s a solemn holiday. But within commerce, Memorial Day weekend has long served as a period when inboxes fill with discount codes, storefront banners multiply and merchants try to turn seasonal urgency into sales.
This year, the holiday has arrived, and the sales linger with another question in the background: After months of earnings calls, retail sales releases and consumer surveys, what condition is the consumer actually in as the second half of 2026 approaches?
The state of retail may be less straightforward than many would like, especially the retailers.
A May PYMNTS Intelligence report, “Inside the Cutback Economy: How Age, Behavior and Financial Pressure Shape Consumer Spending,” indicated that financial pressure is shaping purchasing decisions in ways that are becoming harder to capture through broad retail averages alone. More than one-third of adults in the United States were in active financial retreat as of April, while spending adjustments increasingly centered on cutting everyday expenses, delaying larger purchases and redirecting budgets toward recurring obligations rather than discretionary categories.
The largest differences are not necessarily between generations but within them. Consumers of similar ages are arriving at different outcomes depending on savings cushions, income stability and the financial tools available to them. Among financially pressured consumers, cutting everyday spending became the dominant response, while avoiding large purchases remained widespread.
Walmart’s latest quarter indicated that digital channels are not only resilient but are serving as growth engines. The retailing behemoth logged another quarter of double-digit eCommerce growth and highlighted stronger engagement through stores, delivery and membership ecosystems, which gives the nod to the connected experience that has been surfacing in PYMNTS Intelligence reports.
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Walmart executives also drew a distinction between customer groups. Management said high-income consumers remained comparatively confident across categories, while low-income households continued to show greater budget discipline and signs of financial strain.
Consumers are continuing to transact, but more dollars are flowing toward essentials and recurring obligations, while furniture, apparel and other discretionary areas face uneven demand.
Retail sales data showed uneven demand. Card network earnings help explain where the money is actually going. Visa and Mastercard results pointed to growth in both debit and credit volumes. American Express added another layer, as metrics were supported by young consumer cohorts and continued spending in goods and services.
Card networks showed that consumers are still transacting. Buy now, pay later (BNPL) providers offer a closer look at how households are deciding which purchases survive budget pressure.
Affirm’s most recent earnings report suggested that installment usage continues to move deeper into everyday commerce while remaining strongest in categories tied to larger purchase decisions. Affirm’s gross merchandise volume rose 35% year over year to $11.6 billion, while transaction growth reached 45%. Management pointed to continued momentum in travel, platform partnerships and repeat usage.
In Klarna’s case, the company highlighted apparel and fashion, beauty, home goods, consumer electronics and travel as important transaction categories.
Memorial Day promotions will still move inventory. The broader question is whether retailers can convert short-term promotional demand into sustained engagement with shoppers who are becoming more selective about every dollar they commit.
Looking ahead to the remainder of 2026, the changing dynamic could herald a greater emphasis on loyalty programs, targeted promotions and payment flexibility rather than broad discounting. Retailers that can reduce purchase friction without sacrificing margin may be better positioned than those relying on traffic alone.
