Walmart's logo is seen outside one of the stores in Chicago, Illinois, U.S., November 20, 2018.
Walmart's logo is seen outside one of the stores in Chicago, Illinois, U.S., November 20, 2018. Reuters / KAMIL KRZACZYNSKI

U.S. retailers tumbled on Tuesday after a forecast cut from industry bellwether Walmart Inc stoked fears of similar warnings from a sector struggling with the impact of high inflation on consumer spending.

Online retailer Amazon dropped 2.8%, while Nike Inc fell 2.4%. Kroger, Best Buy, Costco, Target, TJX Companies, Lululemon and Home Depot slid between 2.5% and 5%.

U.S.-listed shares of Shopify Inc slumped 15.8% after the e-commerce firm said it would cut 10% of its workforce as it struggles with sales growth due to a post-pandemic slowdown in online shopping.

Segments of the U.S. population including the middle- and lower middle-income groups are reducing spending, said Kim Forrest, chief investment officer at Bokeh Capital Partners.

"A lot of the retailers have probably ordered a wrong mix which was still heavily weighted towards stay-at-home sort of products."

Walmart's outlook provided "a diagnostic look at the average American household," showing that consumers are digesting higher prices of food and essentials by lowering spending on discretionary categories such as apparel, according to Jefferies analysts.

The biggest private U.S. employer said its annual profit could fall by as much as 13%, adding that it would cut prices of clothing and general merchandise more aggressively to attract investors.

"Whether we are in or heading into an overall recession, it's going to feel like a recession in apparel," analysts at Citi Research said in a note.

Big box retailer Target, which lowered quarterly profit margin forecast in June and said it would offer deeper discounts to reflect weak demand, will report results next month.

Bucking the trend, Coca-Cola Co raised its full-year revenue and profit forecasts on Tuesday as demand for sugary sodas stayed strong despite price increases. McDonald's Corp also reported quarterly comparable sales above market expectations even as expenses soared.