![](\"https:\/\/www.thestreet.com\/.image\/c_fit%2Ch_800%2Cw_1200\/NDA6MDAwMDAwMDAyODcxMDU1\/home_depot_shutterstock_.jpg\")
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In 2025, Home Depot was the world\u2019s largest home improvement retailer based on net sales, according to a recent Securities and Exchange Commission (SEC) filing.\u00a0<\/p>\n
The retailer reported $164.7 billion in sales at the close of FY2025, up 3.2% from 2024.<\/p>\n
Because of the company\u2019s sheer size and reach \u2014 it serves both DIYers and pros, and sells merchandise in every category from hardware to seasonal decor \u2014 trends in its sales often mirror wider trends in the economy and housing market.<\/p>\n
Which is why the latest shift in its shoppers\u2019 behavior is particularly worrisome.<\/p>\n
Home Depot has seen big drop in discretionary spending<\/p>\n
Home Depot\u2019s recent 10-K filing reveals that while the retailer has seen an uptick in big ticket sales, it\u2019s seen a significant drop in appliance sales.<\/p>\n
In Q4 FY2025, big-ticket transactions of $1,000 or more were up 1.3%, year over year. However, appliance sales have consistently been dropping for the past three years, making up just 8.5% of the company\u2019s total net sales in 2025, down from 8.8% in 2024, and 9.1% in 2023.\u00a0<\/p>\n
Instead of shelling out on discretionary items, like a new dishwasher or high-tech fridge, shoppers are spending money on repair and maintenance categories, like plumbing and electrical, the data shows.\u00a0<\/p>\n
This seemingly indicates a consumer base that has a cautious attitude about the state of the economy. They\u2019re willing to spend on essentials, but not as eager to drop money on unnecessary upgrades.<\/p>\n
\u201c[Consumer uncertainty] is still the number one reason why people are telling us, our customers are telling us, that they’re not investing, certainly in large projects,\u201d Home Depot CEO Ted Decker told investors during the company\u2019s Q4 FY2026 earnings call.\u00a0<\/p>\n
\u201c[It] has everything to do with consumer confidence and sentiment, jobs picture, overall, you know, price levels and affordability in the economy,\u201d he continued.<\/p>\n
Home Depot sales data reveals a drop in both essential and non-essential spending, indicating that consumers are worried about the state of the economy and the housing market.<\/p>\n
Shutterstock<\/p>\n
Remodeling spending is also slowing<\/p>\n
It\u2019s not just discretionary spending that\u2019s slowing, either. Home Depot\u2019s filing also reveals that homeowners are spending less on essential improvements and remodeling projects.<\/p>\n
\u201cYou’ve heard us talk before about the cumulative underspend in home improvement,\u201d Decker told investors. \u201cWe used some third-party consulting folks who put that at $22 billion today, that people have underspent on the aging home.\u201d<\/p>\n
The underspend can be seen in categories like bath, which saw a 0.2% drop year-over-year, flooring, which saw a 0.4% drop, and kitchen & blinds, which saw a 0.1% drop.<\/p>\n
More retail:<\/p>\n
Lowes takes on Home Depot with upgraded shopping experienceT-Mobile quietly makes abrupt move as customer losses mountLowes responds to housing slump with new shopper perks<\/p>\n
Annual spend on improvements and maintenance to owner-occupied homes is expected to decline even more in 2026 according to Harvard University\u2019s Joint Center for Housing Studies.<\/p>\n
\u201cThe Leading Indicator of Remodeling Activity projects that year-over-year growth in home renovation and repair spending will be 2.9 percent early this year before easing to 1.6 percent growth by the end of the year,\u201d a January 2026 report from the research center said.<\/p>\n
Both the Joint Center for Housing and Home Depot agree that this drop in essential spending is also tied to a negative economic outlook.<\/p>\n
“Our customers tell us they have concerns over general economic uncertainty, including inflation, growing job concerns, and higher financing costs,” Home Depot\u2019s CFO Richard McPhail said during February\u2019s investor call. <\/p>\n
The housing market and Home Depot customers<\/p>\n
Larger housing market trends have also had a major effect on Home Depot\u2019s shoppers.<\/p>\n
\u201cHousing turnover has remained at historical lows since 2023, which has significantly reduced demand for projects and other purchases associated with buying and selling a home,\u201d McPhail said during the investor call.\u00a0<\/p>\n
\u201cTurnover obviously helps people fix things up before they sell, and the new owner modifies the house to how they want it,\u201d Decker agreed. \u201cIt also has an impact on the people who think they’re gonna move and are just waiting in more of a repair than a replacement cycle.\u201d\u00a0<\/p>\n
There does seem to be some indication that housing market tides are beginning to turn, at least in some corners of the country. TheStreet\u2019s Laura Grace Tarpley recently covered Redfin\u2019s assessment that we are finally in a buyer\u2019s market.<\/p>\n
While the data may bear that out, consumers aren\u2019t yet fully confident that the shift will persist, something their spending reflects.<\/p>\n
\u201cAs we look ahead to fiscal 2026, we anticipate these pressures will persist, as we have not yet seen a catalyst for an inflection in housing activity,\u201d McPhail told investors.<\/p>\n
Related: Dollar General makes a big change that might upset customers<\/p>\n
#Home #Depot #sees #worrisome #shift #consumer #behavior<\/p>\n","protected":false},"excerpt":{"rendered":"
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