Home improvement retailer The Home Depot has reported a modest fall in sales in the second quarter as consumers hesitate to spend on discretionary categories.

The business reported sales of $42.9 billion, down 2 per cent while comparable sales fell by 5 per cent.

Ted Decker, chair, president and CEO of The Home Depot, said he is “pleased” with the retailer’s performance in the quarter.

“While there was strength in categories associated with smaller projects, we did see continued pressure in certain big-ticket, discretionary categories.

“We remain very positive on the medium-to-long term outlook for home improvement and our ability to grow share in a large and fragmented market.”

Neil Saunders, MD of GlobalData, said the second quarter has registered a “modest” dip in revenue compared to the previous period.

“The dip is also towards the top end of guidance, which suggests Home Depot is not faring quite as badly as it feared at the start of this year.

“Nevertheless, sales are down by 2 per cent on last year which is an indication that the economy no longer has the firepower to support continued growth.”

Saunders added that the housing market is more “sluggish” now with transactions suppressed and consumers reluctant to move mostly due to higher interest rates.

“This puts a dampener on home improvement spending among consumers and professionals, especially for the bigger projects that people tend to do once they take possession of a new home.

“Unfortunately, our data show that improvement spending for movers remains elevated for around three years from the date they move in, so reduced activity in the housing market today will continue to have an impact for many quarters to come,” said Saunders.