What Walmart Sales Slump Is Telling Us
Walmart sales slumped in February. By now, many of you probably heard all about this. The headlines were prompted by a leaked e-mail from a senior executive who called the sales numbers a "total disaster."
Okay, maybe he exaggerated. After all, Walmart isn't used to this sort of slip in sales. The behemoth just keeps chugging along as it imports cheap stuff from around the world and sells it at cheap prices. This formula's worked for decades. So what's up now?
Well, even if there was some exaggerated, emotional reaction expressed in that e-mail, here's what I think this sales slump is telling us: Americans live paycheck to paycheck.
Okay again, so some of you knew that. But I don't know that you've ever really thought about what this means (that is, unless you live from paycheck to paycheck, heaven forbid). It's not a pretty picture.
Rick Karlgaard, the publisher of Forbes, recently commented about the Walmart sales slump in the Wall Street Journal. He points to three economic factors that account for this slump:
So if the expiration of the payroll tax cut means you get around $80 less per month (based on the average earnings of the average Walmart customer), that's means you spend $80 less this month. If you spend more on gas, then it's even less for other basic items. You get the point here: these people are directly and immediately effected by a reduction of even a nickel in what they take in.
On the other hand, are all these folks going to starve? Should we feel sorry for them? (I certainly don't think we feel sorry for Walmart, right?) I don't know. I suspect many of the P-to-P crowd aren't just spending on necessities like food, clothing and shelter. In fact, I've run into many people who are by no means "poor" under any definition of the word. They just spend whatever they've got. They live paycheck to paycheck.
Of course, if some are really up against it and spend what they get just on necessities, that's another story. But how many of those are there out there? Given the explosive increase in food stamps (or whatever they call that government program these days), I'm not sure there are lots of starving people out there.
No, not all Americans living paycheck to paycheck are poor. But you can be sure the pressure will build on the government to "do something" at some point if Walmart's numbers keep slipping. I suspect we'll be hearing about how Americans can't afford to live, or some such argument. And the government's going to have to "step in" to save them.
Heck, the more I think about this, is it so crazy to imagine a day when the government will not only give more money to the P-toP's, but maybe they'll even bail out Walmart if this sales slump continues - you know, in the best interests of the American people or some such nonsense?
Okay, maybe he exaggerated. After all, Walmart isn't used to this sort of slip in sales. The behemoth just keeps chugging along as it imports cheap stuff from around the world and sells it at cheap prices. This formula's worked for decades. So what's up now?
Well, even if there was some exaggerated, emotional reaction expressed in that e-mail, here's what I think this sales slump is telling us: Americans live paycheck to paycheck.
Okay again, so some of you knew that. But I don't know that you've ever really thought about what this means (that is, unless you live from paycheck to paycheck, heaven forbid). It's not a pretty picture.
Rick Karlgaard, the publisher of Forbes, recently commented about the Walmart sales slump in the Wall Street Journal. He points to three economic factors that account for this slump:
- The expiration of the payroll tax cut
- Food prices rising faster than inflation
- Gas prices up 30 cents in 2013
So if the expiration of the payroll tax cut means you get around $80 less per month (based on the average earnings of the average Walmart customer), that's means you spend $80 less this month. If you spend more on gas, then it's even less for other basic items. You get the point here: these people are directly and immediately effected by a reduction of even a nickel in what they take in.
On the other hand, are all these folks going to starve? Should we feel sorry for them? (I certainly don't think we feel sorry for Walmart, right?) I don't know. I suspect many of the P-to-P crowd aren't just spending on necessities like food, clothing and shelter. In fact, I've run into many people who are by no means "poor" under any definition of the word. They just spend whatever they've got. They live paycheck to paycheck.
Of course, if some are really up against it and spend what they get just on necessities, that's another story. But how many of those are there out there? Given the explosive increase in food stamps (or whatever they call that government program these days), I'm not sure there are lots of starving people out there.
No, not all Americans living paycheck to paycheck are poor. But you can be sure the pressure will build on the government to "do something" at some point if Walmart's numbers keep slipping. I suspect we'll be hearing about how Americans can't afford to live, or some such argument. And the government's going to have to "step in" to save them.
Heck, the more I think about this, is it so crazy to imagine a day when the government will not only give more money to the P-toP's, but maybe they'll even bail out Walmart if this sales slump continues - you know, in the best interests of the American people or some such nonsense?
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