Thursday, April 9, 2009
Wal-Mart lower than expected sales reflects declining buying by American consumers and bodes ill for any kind of economic recovery soon
Wal-Mart Stores reported significantly lower sale increases in March than analysts expected, reflecting a sharp decline in consumer buying that bodes ill for an economic recovery soon.
The data is part of a growing trend. Feburary Federal Reserve numbers on consumer debt released this week showed a record decline in credit card spending.
Americans are closing their wallets and preserving household income, which is good for them to survive a recession that no one knows its duration. They also are fearing losing their own jobs. The creation or preservation of emergency fund accounts in households is a must.
However, less buying means lower corporate earnings and more layoffs at jobs providing product and services people aren't purchasing.
Wal-Mart [WMT 50.14 -2.47 (-4.69%) ] stores says U.S. same-store sales rose 1.4 percent in March as consumers continued to hunt for bargains and bought necessities, such as groceries. But the results are below Wall Street expectations.
Analysts polled by Thomson Reuters expected the world's largest retailer to post a larger 3.2 percent gain in same-store sales, or sales at stores open at least one year.