Wal-Mart Dumps Cold Water on U.S. Economic Bulls

Thu November 13, 2003 02:14 PM ET

By Ros Krasny

CHICAGO (Reuters) - Economists and politicians giddy about prospects for U.S. economic growth got a dousing of cold water on Thursday from Wal-Mart Stores Inc., the world's largest company.

The retailer -- which taps directly into the psyche of the U.S. consumer -- gave a downbeat economic outlook that contrasted with reams of recent data, and bluntly suggested that many of its shoppers are barely making ends meet.

Customers continue to buy the cheapest items in any given category -- a sign that household budgets remain tight, Lee Scott, Wal-Mart chief executive officer, said on a recorded message.

Buyers are "timing their expenditures around the receipt of their paychecks, indicating liquidity issues," Scott said.

"I don't think consumer spending is slowing, but I also don't see the strength that many of you in the investment community appear to see," Scott said.

More
http://www.reuters.com/newsArticle.jhtml?type=topNews&storyID=3816825

Do you really know what's going on. If you give a cursory glance at the media then you'd think the economy's starting to boom...Prosperity's right around the corner...

The rest of us are picking up the leavings, and the pickings are mighty slim.

7.2% growth my :kick:

class action suit. Wal-Mart is lower than a snakes belly. Called all my relatives ont he east coast and let them know about it. Most will never shop at Wal-Mart again.

Oh, yeah, my family is doing the boycott thingy...buying only necessities, eliminating a lot of entertainment luxary items and banking our money or pooling it for college tuition for at least three family children entering college next year. I wish more people would join us in our family protest against Bush, the Republicans, and the Iraqi war.
It's not a lot of fan-fare but we hope it catches on. Two other families that we know are doing the same thing. The very worst that could happen is that we have some money in the bank. We are trying to hurt the corporations where it hurts...on their bottom line. We refuse to help spend Bush's way back to a thriving economy. We are all suffering now so if the economy tanks a little more, we can stand it. But we want to do something that keeps us from feeling so powerless about this evil administration. If nobody else joins us or cares...we know that we do.

That's odd. I thought that was all Wally's World sold anyway. How would they know the difference?

Doesn't matter to me what's going on at the big W. My boycott of Wal-Mart continues.

If you have gone to the PX you would notice the same

a basic coffee maker goes from 10 bucks (made in Mexico, don't scuff)
to 120 made in China (Yes I found it ironic the cheapest was made
within the Nafta zone)

The product spread at the PX is about the same as Walmart and no taxes...either

It cannot work. People need jobs, good paying jobs in order to sustain the economy. Basing the economy on consumer spending is like living off of your credit cards, one day the bill will come due, and you will not be able to continue.

this is bad for the Cheap Labor conservs, if they cannot afford
Walmart the reality is starting to hit.

We are at the start of that deflation folks, we just may get used
to it

they would make aren't there...

I think that they key to this is the fact that people aren't spending as much on non-necessary goods. So they aren't going to WalMart to pick up the latest CD's or books... they are going there to buy food or essentials.

If this keeps up Wal Mart may find themselves with a lot of stock they can't get rid of...which is kinda funny for a company that prides itself for providing the lowest prices...when you can't get rid of stuff when its cheap...that's pretty bad.

Personally any company that grows that immense normally crushes itself with its weight. It may take a long time to die...but eventually it will.

.

marketed to the public as a "reorganization"...as all sub groups of Ford are sold off to competitors or spun off into smaller more manageable companies.

Wal-Mart may be many things, but they're well up on what and when their customers buy and the reasoning behind it.

The media is all, well and good but they have made their pile and, having done so, are somewhat isolated from the main body of people who generate most of the sales in the country. Theory is fine gut offers few calories to sustain the average working person.

I think it would be a good idea to watch Wal-Mart and the other discount retailers to get a better idea of the health of the economy than the pundits and cheerleaders.

see it for yourself, one way or another.

Customers continue to buy the cheapest items in any given category & timing their expenditures around the receipt of their paychecks

You mean we're not suppose to be doing this????

(edited for clarity)

Cheap stuff doesn't work right and falls apart. A cheap towel doesn't dry well and looks like hell the first time you wash it; a good towel is a joy to use and lasts darn near forever. A cheap pot will burn your food and warp before you know it; a good pot you can pass on to your children. Buying cheap crap is a false economy--you wind up spending more in the long run.

Means it is. We are headed back into the "W" recession.

over the economic recovery myth is the definition of
irony.

I'd look at results from Walmart AND Target AND some of the mega-food chains before I conclude anything about the the economic recovery, remember cyclical waves, up and down, are constant.

When Wal-Mart's business is down, it speaks volumes.

I just got back from my home town (4,000 population then, 11,000 now) and since Wal-Mart arrived, the entire downtown area looks like hell. 12-15% unemployment, small businesses gone, storefronts closed up.

The race to the bottom of the world economy is on. Welcome to third-world wages.

...can be really bad business when combined with the type of economy we are in right now.

Don

:eyes:

If enough of us don't go there it will make a difference! It will take time but, it will make a difference!

Customers continue to buy the cheapest items in any given category -- a sign that household budgets remain tight

Or it could mean that customers are buying the good stuff somewhere else. Or that they just choose to use the cheap stuff even though they don't have to.

Consider: toilet paper. Wal-Mart el cheapo does exactly the same thing as Charmin, except that it costs less.

Quick question, ladies: if you're spending $15 on a lipstick in a shade you've never worn before, and the Wal-Marts in this area are starting to carry $15 lipsticks, would you go to Wal-Mart, where you can see the color on a little hunk of plastic--or to a department store, where you can see the color on your lips?

You go to Wal-Mart to buy the cheapest item in any given category. That's why they're there.

granted they do sell brand names but in regard to your question on lipstick...there is a special aura about buying lipstick at the counter of a department store or a makeup speciality store... women go there not just for the lipstick and stuff...they go there for the mini-pampering treatment...

now that I have two kids and too much stuff to do... I find that when I do have a day out to get my hair done and just shop for the little luxury items...I want to do it in a nice store with room to walk around... granted I don't pamper myself all that much anymore but when I want to...Wal-Mart isn't the place I would go...in fact I don't go there at all anymore based on how they treat their employees...

I've heard and read too much about Wal-Mart's cutthroat business practices so I don't go there anymore. Perhaps other people are "boycotting" Bentonville's Evil Empire and that contributed to this news.

As for Wal-Mart carrying a $15 lipstick, I doubt it. Maybe $7 for a brand like Revlon or L'Oreal but even there, I think Wallyworld would have them marked down to around $5.

If you want to shop cheap but still get a little style bang for your buck, go to Target.

alternatives to those slavers.

it could affect the workers. I would guess that in many of small towns Walmart provides some of the only employment for miles, particularly for older people who can't make ends meet or want to do something during the day. I think it was Walmart who had the greeter
inside the front door, always a nice little old guy, it seemed to be his only job there. I would hate to see these kind of people get hurt.

I shop at garage sales and on eBay. It puts money right in someone's pocket and is a good way to recycle. I would love it if DU had some sort of eBay program; we could buy from one another and help DU at the same time.