Archive for Saturday, July 5, 2008
Caution
Wal-Mart’s response to the status of the economy indicates that rough times could lie ahead.
July 5, 2008
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When the world’s largest retailer begins to pull in its horns, it’s time for everyone to take note.
Wal-Mart, long dedicated to growth and expansion, is reducing its capital spending forecast for fiscal 2009. Officials say the firm is slowing construction of supercenters in the face of a weakening United States economic environment.
The company says it expects to spend $13 billion to $14 billion during the fiscal year ending Jan. 31, 2009. Last October, Wal-Mart had said it planned to spend up to $15.2 billion.
Chief financial officer Tom Schoewe said the lower forecast “reflects Wal-Mart’s ability to grow more efficiently with reduced capital expenditures.” He says the company plans to moderate supercenter growth in the United States. In effect, that means somebody has been checking the cash drawer and doesn’t see a good chance it will become overloaded in the near future.
The firm is big enough and flexible enough that it can adjust in an upward direction if there are improved conditions. The fact it is acting prior to a crisis indicates good management. But it also reiterates what a lot of financial experts such as Warren Buffett have been saying for some time: A status of recession exists and it may not dissipate soon.
Analysts say they are not surprised by the news. Schoewe told shareholders at the annual meeting earlier this month that capital spending would likely be at the low end of the projected range. This just reaffirms that cautionary declaration.
It also emphasizes that the American economy is struggling and probably will take quite a while to gain a more profitable footing.
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5 July 2008 at 6:05 a.m.
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merrill (Anonymous) says…
Their stores abroad are not doing well as those abroad take a dim view of Wal-Mart. Sales are in big trouble so I read. After all Wal-Mart is not the big bargain of the day and they contribute huge amounts of revenue to the Chinese government instead of providing work for americans.
This one of those billion dollar industries that routinely request tax dollar assistance yet refuse to support the american blue collar workers. It obviously cost way more to shop Wal-Mart.
Be smart! Shop Cottins,The Merc,The Casbah,Checkers,Weavers,Sunflower,Cycle Works,Browns Shoe Store,Ernst Hardware downtown,Eastside Grocery,local nurseries,Raven Book Store,Bayleaf etc etc which keeps the money in Lawrence,Kansas.
5 July 2008 at 9:07 a.m.
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xbusguy (Anonymous) says…
I used to say ” if I can't find at Walmart, I don't need it”
Now I say ” If it is at Walmart, I don't want it”
5 July 2008 at 10:03 a.m.
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SouthernBelle (Anonymous) says…
There are a lot of us who aren't exactly fans of Walmart. But, in reality, because of their ability to buy in such large quantities, their prices are much lower than any of the local businesses you recommend. With the economy the way it is, those of us with very tight budgets don't seem to have a choice but to shop where our dollars can buy more.
5 July 2008 at 10:44 a.m.
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RETICENT_IRREVERENT (Anonymous) says…
I stopped going to Walmart when they stopped selling guns.
Damn pansy corporation.
5 July 2008 at 12:45 p.m.
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Mike Blur (Mike Blur) says…
Wow, funny and clever, reticent. A silver star for you. I think.
5 July 2008 at 1:02 p.m.
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yellowhouse (Anonymous) says…
I don't go to walmart nearly as much because I dont want to use my gas.
5 July 2008 at 6:41 p.m.
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George_Braziller (Anonymous) says…
I'd love to have K-Mart back. I think it's a bit odd that there's a regional K-Mart distribution center in Lawrence but not a store.
5 July 2008 at 8:05 p.m.
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Kookamooka (Anonymous) says…
Does this mean they'll stop construction on that monstrosity they are building in West Lawrence?
5 July 2008 at 8:13 p.m.
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Godot (Anonymous) says…
Is Dolph on vacation or something? This has to rank in the top 5 lamest, most ignorant editorials ever on the LJW.
5 July 2008 at 9:16 p.m.
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hairshoptalk (Anonymous) says…
what does this mean for the new wally world in west Lawrence? That was a lot of new jobs not only for wal mart but for the other jobs that would need to be done? construction jobs and etc. that could really benefit Lawrence.
5 July 2008 at 10:16 p.m.
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beatrice (Anonymous) says…
RI, you can't buy guns at Wal-Mart? Dude, you just don't know who to talk to. Do you really think all those boxes in the storeroom marked “VCR” are the real deal? Seriously, when was the last time someone bought a new vcr? Just go to the electronics section and ask for Pete … “Pistol” Pete. He'll hook you up.
6 July 2008 at 1:47 a.m.
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myopinion (Anonymous) says…
If you really wonder what happened to K-Mart in this city, then you probably haven't been here too long. K-Mart used to do well here when quality mattered. Many of us remember when K-Mart was the only store who cared about low income families. WalMart took over that market and then went on to destroy at least the local K-Mart. Time will tell if people want low income jobs and a blatant lack of respect for employees or a store with some values like K-Mart had. K-Mart has since linked up with Sears, and hopefully they will do better and keep the jobs here and local with a decent wage and some respect for their employees.
6 July 2008 at 5:28 a.m.
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offtotheright (Anonymous) says…
Uh Huh! Sears will be out of business within 5 years or sooner!
6 July 2008 at 10 p.m.
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George_Braziller (Anonymous) says…
I've lived here for 26 years. Does that qualify as long enough? Still think it's strange that there is a distribution center but no store in Lawrence.
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myopinion (Anonymous) says…
If you really wonder what happened to K-Mart in this city, then you probably haven't been here too long. K-Mart used to do well here when quality mattered. Many of us remember when K-Mart was the only store who cared about low income families. WalMart took over that market and then went on to destroy at least the local K-Mart. Time will tell if people want low income jobs and a blatant lack of respect for employees or a store with some values like K-Mart had. K-Mart has since linked up with Sears, and hopefully they will do better and keep the jobs here and local with a decent wage and some respect for their employees.
6 July 2008 at 10:56 p.m.
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RETICENT_IRREVERENT (Anonymous) says…
“WalMart took over that market and then went on to destroy at least the local K-Mart.” - myopinion
Gosh I hate it when those corporations use their voodoo magic and make me shop there…
6 July 2008 at 11:30 p.m.
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notajayhawk (Anonymous) says…
Yeah, gee, the economy is *so* bad, and Wal-mart sales are dropping *so* low, that they're going to spend *only* 13 or 14 *billion* dollars on expansion next year - including one right there in Lawrence. And that's what “a lot of financial 'experts'” call a recession. Brilliant.
6 July 2008 at 11:59 p.m.
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notajayhawk (Anonymous) says…
Incidentally, spending *only* 13-14 billion on expansion is an increase of between 8.6 and 9.3% in their holdings (assets last year were about $151B), and represents more than last year's profit. Some recession. And with all due respect to Mr. Buffet (the same guy who claims his secretary pays 30% in taxes on a $60K income), Wal-mart revenues are about four times what Berkshire-Hathaway's are.