Archive for Friday, February 19, 2010

Walmart stores see U.S. sales fall

February 19, 2010

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A shopper makes her way to her car Thursday at a Walmart in Brunswick, Maine. Wal-Mart Stores Inc., one of the recession’s biggest beneficiaries, felt the pinch during the fourth quarter as quarterly sales fell at U.S. Wal-Mart stores for the first time.

A shopper makes her way to her car Thursday at a Walmart in Brunswick, Maine. Wal-Mart Stores Inc., one of the recession’s biggest beneficiaries, felt the pinch during the fourth quarter as quarterly sales fell at U.S. Wal-Mart stores for the first time.

— After nearly 50 years of hammering competitors with discounts, Wal-Mart is getting a taste of its own medicine.

The world’s largest retailer has reported sales at its U.S. Walmart stores falling for the first time, as price-cutting competitors lure away bargain-hunters. Department stores and dollar stores are muscling in on the company’s discount turf.

And executives do not expect much improvement in this quarter, forecasting sales at stores open at least a year will range from down 1 percent to up 1 percent.

“They’re being squeezed from the top … and from the bottom,” said Michael Hicks, associate professor of economics at Ball State University who wrote a book about Wal-Mart’s economic impact.

Overall, Wal-Mart’s overseas growth and a concerted cost-cutting campaign pushed profit up 22 percent in the fourth quarter. Wal-Mart earned $4.63 billion, or $1.21 per share, up from $3.8 billion, or 96 cents per share, in the same quarter last year. Excluding businesses that the company no longer operates, it earned $1.23 per share.

The 0.5 percent sales decline reported Thursday covered the three months ending Jan. 31 at the company’s namesake stores. It was the first year-over-year quarterly decline since Wal-Mart Stores Inc. went public in 1969.

Department stores such as Macy’s and Kohl’s came into the holiday season ready to compete on price and saw sales rise as a result in December and January.

On the other end, discounters like Family Dollar Stores have added more groceries. And even Sears Holdings Corp.’s long-suffering Kmart has seen a rebound in sales. Target Corp., increasing its food offerings and focusing on low prices in its advertising, is slated to report fourth-quarter results Tuesday.

Organic grocer Whole Foods Markets Inc., often known as “Whole Paycheck” for its high prices, even got into the price-cutting game, helping bring back customers who left in the recession.

Wal-Mart’s own parade of holiday discounts had less effect, as the chain drew fewer shoppers who spent less per trip. The weak U.S. sales underscored the financial pressures the company’s customers continue to face and raised concerns about its ability to keep new and more affluent shoppers, who are seeing an abundance of cheap options.

Wal-Mart officials said that deflation in such areas as electronics and groceries was the biggest factor in dampening sales, but the company’s chief financial officer, Tom Schoewe, acknowledged “tough” competition from rivals. The company also cited a massive store renovation program as keeping some customers away.

Schoewe said falling prices for food and electronics, which have helped to drag down revenue for the past three quarters, were worse than expected. Groceries make up about half of Wal-Mart’s business.

Comments

Richard Heckler 5 years, 6 months ago

Wal-Mart can't go out of business soon enough. The right wing fundamentalist owners are hard on the economy and they treat their employees terrible. Wal-Mart is american in name only and should be stripped of all tax breaks/incentives.

Not to mention Wal-Mart is not the bargain their massive advertising pretends it to be. The newly remodeled Dillions stores are as competitive with their homewares. Weavers dowtown is also competitive.

Then again so is Cottins Harware.

We quit shopping Wal-Mart going on six years ago because they are a crummy corporation. Their prices simply are not that hot a deal either.

http://walmartwatch.com/issues/ And when shopping Wal-Mart you are shopping americans out of jobs.

Scott Drummond 5 years, 6 months ago

And Barry, if Walmart did not get their shoddy goods from China's wage slaves, where would the goods come from? If from domestic sources I would think that would be beneficial to many of our fellow citizens.

puddleglum 5 years, 6 months ago

HAHAHAHAHAHAHAHAHAHAHAHAHAHA!

go to hell, walmart.

and take China with you.

maybe barry penders can suggest some way to help China out?

China-stimulus, pender-fear, and Walmart sales-slump live unprecedented.

bless yourself with more chinese-junk.

puddleglum 5 years, 6 months ago

why don't we build a space station for wal-mart to up-load all its QUALITY products, built in china, then as the world turns, said QUALITY products can be parachuted down to our hamlet.

everybody wins!

China-stimulus, penders economics, and Walmart sales-slump live unprecedented.

puddleglum 5 years, 6 months ago

you are correct Liberty_One:

china doesn't have any slaves. heck, if they don't like wroking in the factory for $12/month, they can go right out and build their own factory to compete with their former bosses. and with all the helpful Chinese-labor laws, they probably don't mind working 18 hour days-hey, that leaves plenty of time for a nice 6-hour night's sleep, right? and if you get to start working when you turn 10 years old, so you get rich much faster than poor americans, who can't start until they turn 16. Plus the added bonus of working around machinery that the U.S. has outlawed for some petty reason like safety. Hey, if the fabric loom rips off your arm-that is just that much more room for you to get comfy in your 2'X 5' cot in the factory 'dormitory'. now wait, who financed the building and design and operation of these factories?

madameX 5 years, 6 months ago

I don't know about anyone else, but #'s 1 through 8 on Tom's list actually involve less driving for me than Wal-mart. For tires I go to D & D (downtown, see #5), there's nothing I need at #10 (but that's just me) and very little I need at #11. So not necessarily on the higher energy consumption.

remember_username 5 years, 6 months ago

Personally I don't see anything wrong with Walmart suffering some competition from other sellers. I do think that it's unfortunate that the competition comes as a result of the other sellers adopting the Walmart methodology. If American consumers want to buy cheaper foreign goods while American manufacturing lays off American employees and moves overseas, they are certainly free to do so, but they really shouldn't get so upset and blame everyone else for continued high unemployment.

puddleglum 5 years, 6 months ago

Liberty One, yeah, it is all make-believe.

go back to sleep, it is okay.

yeah big barry, those 70's japanese cars were junk. but they learned quickly and began the epoxy-primer WAY before the american car companies even knew what was going on, and they improved their flimsy metals and they kept grinding at the economy market and pretty soon, those little hondas no longer rusted out within 2 years. meanwhile, the U.S.A. big three continued to find ways around their self-created labor union woes, pitifully ignoring their product and doing everything they could to set up shop in Mexico.

blueharley: "They sure as hell wouldn't come back to the US." what comes around goes around. eventually, it will not be cost effective to ship anything around the world and depend on cheap labor. sadly, tony88 has it figured out.

speaking of shipping, has anyone noticed how Fedex closed their shipping terminal here? I know that you can still go down to kinkos, but.... the u.s. postal freight has lowered weight maximums and limited the sizes yet again of international packages, eliminating anything over 4 ft long. also, UPS has more than doubled their ground rate in the last 4 years.

walmart tears, penders & hondas, and shipping woes live unprecedented.

sam walton bless you.

Scott Drummond 5 years, 6 months ago

"If the manufacturing jobs left China they would just go to India, Malaysia, Brazil, Mexico etc. They sure as hell wouldn't come back to the US. It costs too much to manufacture stuff here. Gotta deal with too many govt. regs and too many lawyers."

Unless, of course, we changed our "free" trade policies and adopted policies that encouraged domestic manufacturing. Or alternatively, required that if foreign countries want to trade with our consumers they must adopt employment and environmental protections that are substantially similar to our own. That would create a more level playing field for our citizens who work for a living and would do a great deal of good in the world.

Scott Drummond 5 years, 6 months ago

I know Blue Harley. The right wing's steady campaign against a well-educated public (who could discern the harm being done) and constant media propaganda in support of the status quo further contribute to the destruction of our republic. There is little reason to hope that the tide can be turned, but rage against the machine.

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