Walmart has warned that rising gasoline prices are prompting shoppers in the United States to cut back on other spending as the war with Iran continues to strain household budgets. The retailer expects sales growth to slow between May and July compared with the previous quarter, citing higher fuel costs as a key factor.

Average gasoline prices have climbed sharply since the conflict began, reaching 4.56 dollars per gallon, up from 3 dollars. Company executives said earlier tax refunds had helped offset some of the financial pressure on consumers, but that support is now fading, leaving households more exposed to higher living costs.

Walmart also cautioned that prolonged disruption in the Strait of Hormuz could lead to higher food prices due to shortages of fertiliser and key agricultural inputs. Although the company reported strong first quarter profits and rising sales, investors reacted negatively to its weaker outlook, sending shares down.