Prices are dropping for thousands of items at Target and Walmart, as US retailers’ results indicate fatigue among some consumers after three years of high inflation.

Target this week said it would lower prices this summer for 5,000 items ranging from milk to paper towels in an effort to stay competitive. Walmart told analysts last week that it had reduced the prices of a large number of grocery products. 

The cuts by two of the largest general merchandise chains illustrate how retail prices are levelling off, if not falling, after years of increases sustained by pandemic-era supply chain breakdowns and a sturdy US labour market. Persistent inflation has soured Americans’ mood in an election year: 71 per cent of those surveyed in the latest FT-Michigan Ross poll said they believed economic conditions were negative.