Saturday, February 20, 2010

Walmart suffers first ever fall in US quarterly sales

If you weren't entirely buying the whole 'economic collapse' bit before now, maybe this will jar your point of view a little. Things have got to be bad when Walmart starts taking a dump. Laughably, Financial Times (owned by a prominent member of Bilderberg) is still trying to sell us this 'early stages of the recovery' line. Do you buy it? I'm not.

    Financial Times -

    Walmart has suffered its first fall in quarterly sales at its US discount stores, underlining the challenges facing future growth in its home market as the economy recovers.

    During the important holiday quarter ending on January 31, net sales at Walmart's 3,400 plus US stores fell 0.5 per cent year-on-year to $71bn, while comparable store sales declined 2 per cent. Customer traffic also fell.

    The retailer blamed price deflation in food and electronics for lowering the overall value of its sales, as well as the impact of store refurbishment.

    The decline contrasted with the strong sales and traffic growth during its first three quarters, as low prices attracted new budget-minded shoppers.

    Tom Schoewe, chief financial officer, argued that the declines did not mean Walmart was losing some of the customers it had gained during the recession, saying the "modest decline" in traffic was "not in our mind an indication of trend".

    He highlighted the cautious mood of Walmart's largely low-income shoppers, saying there was still a high level of anxiety over unemployment.

    In contrast, retailers such as Whole Foods Market, the upmarket grocer, and Starbucksreported evidence of increased readiness to spend during the fourth quarter, suggesting that different consumer segments are responding differently in the early stages of recovery.

    Mike Duke, Walmart chief executive, pointed to stronger-than-expected earnings growth in the quarter but warned that the retailer expected US sales to be "more challenging" in the first quarter, with improvement as the year progressed.

    In the past, Walmart's US sales have been supported by aggressive new store openings, which it had begun to rein in before the economy worsened to counter fears of saturation.

    Last month it announced a restructuring of its US operations aimed in part at improving its ability to take a more flexible approach to expansion.