Wal-Mart: Our shoppers are running out of money

[peestandingup]

This is interesting. Since Wal-Mart is basically the epitome of what I think are some of the major problems with our country (sprawling suburbs where more gas needs to be used even for minor tasks, non-local goods & services, cheap imported shit from China, etc), I wonder if this is sort of the beginning of a major shift in these things?

NEW YORK (CNNMoney) -- Wal-Mart's core shoppers are running out of money much faster than a year ago due to rising gasoline prices, and the retail giant is worried, CEO Mike Duke said Wednesday.

"We're seeing core consumers under a lot of pressure," Duke said at an event in New York. "There's no doubt that rising fuel prices are having an impact."

More: http://money.cnn.com/2011/04/27/news/companies/walmart_ceo_consumers_under_pressure/index.htm

[danem]

Addressing that challenge, Duke said the company made mistakes by shrinking product variety and not being more aggressive on prices compared to its competitors.

And this is where the article is about how Wal-mart is going to try to compete even MORE on price. Their idea is that in this economy, people will ONLY care about price.

Wal-mart was never going to be a monopoly on the way people buy things. Businesses that know how to differentiate on service, shopping experience, quality, and wider availability of products within their niche have been doing really well and have expanded and haven't had to compete so much on low price. (see Publix, Best Buy, Lowes, etc)

Elsewhere, Duke said Wal-Mart is exploring a number of e-commerce initiatives to grow the business such as testing an online groceries delivery business in San Jose.

So the final answer for Wal-mart, since you have to drive a lot and use gas to get there and park in their enormous parking lot, is to deliver to you. Maybe.  

[Timkin]

You know, there was life , before Wal-mart.   While Sam Walton may have founded it ...I am sure he never envisioned it , as it now is , and would probably not have wanted it to be the demise of mom and pop competitors.

[peestandingup]

Addressing that challenge, Duke said the company made mistakes by shrinking product variety and not being more aggressive on prices compared to its competitors.

And this is where the article is about how Wal-mart is going to try to compete even MORE on price. Their idea is that in this economy, people will ONLY care about price.

Wal-mart was never going to be a monopoly on the way people buy things. Businesses that know how to differentiate on service, shopping experience, quality, and wider availability of products within their niche have been doing really well and have expanded and haven't had to compete so much on low price. (see Publix, Best Buy, Lowes, etc)

Elsewhere, Duke said Wal-Mart is exploring a number of e-commerce initiatives to grow the business such as testing an online groceries delivery business in San Jose.

So the final answer for Wal-mart, since you have to drive a lot and use gas to get there and park in their enormous parking lot, is to deliver to you. Maybe.  

True, but I also think there's a crapload of the population out there that will almost always select lower prices before anything else. Sure, there's always gonna be the underprivileged. But a huge chunk of the middle class is also getting squeezed like never before. All this stuff is starting to pile up & come to ahead (gas, jobs, low wages, insurance rates through the roof, etc).

Hopefully everyone won't act like zombies & go further down this route just because its the cheapest. Because this is actually one of the things that helped with the mess we're in.

P.S. I'm not exactly dissing Wal-Mart specifically, just what it sorta represents. I'm not gonna act like I've never went in there & don't make the occasional late night run for something needed then when everything else is closed. But at least I can put 2+2 together & see the bigger picture. I don't think most people even stop to think about it at all.

[Shwaz]

I've seen multiple articles on how the great recession has actually helped retailers like Walmart. Folks who had traditionally shopped at places like Target started 'buying down' in huge numbers.

For years Walmart's core shopper were low income households - after the economy tanked they saw in an influx of medium income shoppers and the average bill in the checkout line shot up quite a bit.

Higher income shoppers noticed not only that most goods were cheaper than most retailers but the could get way more for under $100.

Winn Dixie claimed this trend was happening in their stores too.

[danem]

I've seen multiple articles on how the great recession has actually helped retailers like Walmart. Folks who had traditionally shopped at places like Target started 'buying down' in huge numbers.

And Wal-mart is here saying that their sales volume just isn't there towards the end of the month, because consumers are "running out of money" by then. The say it's probably price increases tied to increases in fuel prices.

"Purchases are really dropping off by the end of the month even more than last year," Duke said. "This end-of-month [purchases] cycle is growing to be a concern.

[Shwaz]

I've seen multiple articles on how the great recession has actually helped retailers like Walmart. Folks who had traditionally shopped at places like Target started 'buying down' in huge numbers.

And Wal-mart is here saying that their sales volume just isn't there towards the end of the month, because consumers are "running out of money" by then. The say it's probably price increases tied to increases in fuel prices.

"Purchases are really dropping off by the end of the month even more than last year," Duke said. "This end-of-month [purchases] cycle is growing to be a concern.

True. I wasn't arguing against the article that started the topic off... more like saying if Walmart's business is tapering off everyone else is fucked.

[danem]

So what do you think, is truly a sign recovery not quite here yet?

[Shwaz]

So what do you think, is truly a sign recovery not quite here yet?

I think it's pretty obvious that we're nowhere near recovery... but I wouldn't use Walmart to gauge progress.

[mtraininjax]

What IS pretty obvious to the Wal-Mart folks is that people have less money to spend on their stuff, most people, at least 47% in Jacksonville are underwater on their mortgage, because they used to use their home as a piggy bank, buying cars and "stuff" until they cashed in all the "equity". So the good times of the 2000s are over and we are faced with the sobering reality that someone needs to pay for all of the mess. A serious cleanup on aisle 5.

[tufsu1]

at least 47% in Jacksonville are underwater on their mortgage, because they used to use their home as a piggy bank, buying cars and "stuff" until they cashed in all the "equity".

I hope you realize that many of those underwater didn't do what you say...for example, me and 2 of my co-workers bought our houses at the top of the market in 2006....none of us have home equity loans...all of us are underwater (and I put 20% down).

[spuwho]

Based on the growth of NetFlix and RedBox, people still have money to watch movies, just not through Blockbuster anymore.

[peestandingup]

What IS pretty obvious to the Wal-Mart folks is that people have less money to spend on their stuff, most people, at least 47% in Jacksonville are underwater on their mortgage, because they used to use their home as a piggy bank, buying cars and "stuff" until they cashed in all the "equity". So the good times of the 2000s are over and we are faced with the sobering reality that someone needs to pay for all of the mess. A serious cleanup on aisle 5.

I love how you generalize. Makes you sound good & dumb.

Most people I know who are underwater didn't do any of the sort & the only thing they were guilty of was buying a home at the wrong time.

Not saying there weren't people doing what you described, but I think you need to reach further into your "I'm smart, everyone else is stupid" bag of blame. You know, the one with the shiny "Know-it-all Republican" seal on it. It's much deeper than that, chief.

[dougskiles]

What scares me about this mess is that I can see someone proposing another government bailout by subsidizing gasoline.  "It will stimulate the economy!"  "No more gas taxes!"  "The average American can't afford to drive to Wal-mart anymore!"  "These gas prices are un-American!"  "Its communist to have to pay such high gas prices!"

You have to know that kind of talk is coming soon, if it hasn't started already.

[Timkin]

The reality is that if we hadnt sprawled out of control, no one would have to be spending so much damned money on gasoline in the first place. 

^+1000!