Skip to comments.Wal-Mart forecast disappoints, food-stamp cuts hurt customers
Posted on 02/20/2014 7:14:28 AM PST by SoFloFreeper
(Reuters) - Wal-Mart Stores Inc forecast a lower full-year profit than analysts expect, as fewer food stamps, higher taxes and tighter credit erode its sales, news that sent its shares down 1 percent in premarket trading on Thursday.
The world's largest retailer expects net sales growth this year to be at the lower end of its forecast range of 3 to 5 percent, Chief Financial Officer Charles Holley said on Thursday.
Wal-Mart said comparable sales at stores open at least a year in the United States - its biggest unit - fell for a fourth straight quarter, by 0.4 percent. Overall revenue in the quarter through January 31, which includes the key holiday season, grew 1.4 percent to $129.7 billion.
A major factor in Wal-Mart's U.S. performance was a "low-single-digit decline" in sales of groceries at stores open at least a year, which generate about half of its sales.
In contrast, supermarket operators Kroger Co and Safeway Inc reported comparable sales increases for their most recent quarters.
Wal-Mart's grocery sales have suffered from fewer food-stamp benefits resulting from U.S. federal budget cuts in November. One in five of its shoppers relies on food stamps, according to Cowen analyst Tal Lev.
(Excerpt) Read more at reuters.com ...
Uh, two things to take away from this:
1. If Wal-Mart isn’t doing well, the REST of the economy isn’t doing well.
2. If Wal-Mart depends that heavily on government subsidized shoppers for income, the subsidies need to be cut....Wal-Mart needs to sink or swim in the PRIVATE sector.
In my experience (and I worked in this industry for a number of years), if a Retail Exec misses his numbers forecast, he will grasp at ANY straw to try and explain that away.
Food stamp cuts, bad weather, political turmoil in Turkmenistan, Project HAARP, Chemtrails, Martians....whatever.
It’s all about “hang on to my job until annual bonuses are paid” and “keep stockholders from dumping their shares”.
Every time I go in the place it looks like 90% are in that category. That’s one reason I don’t go in that place very often.
What’s the percentage of voters on food stamps?
If you go to Walmart at the beginning of the month when the people on food stamps get a new infusion of funds on their EBT cards, you would think it is more like 80%. If you have to shop their at this time, the trick is to go there in the morning since most of them don't get up until noon.
That’s probably about right figuring around 15% of the country is on food stamps. Poor are more likely to shop at Walmart than at more expensive retail stores.
Another Walmart problem is their generic foods are dreadful... and known companies give them the bottom of the barrel of their production. Walmart’s slipping.
When 1 out of 6 Americans are on food stamps or EBT, the Walmart % data in the ball park.
“Why are 47 million Americans on food stamps? It’s the recession ... http://www.washingtonpost.com/blogs/wonkblog/wp/2013/09/23/why-are-47-million-americans-on-food-stamps-its-the-recession-mostly/ - -
“There’s a fairly basic question at the core of the current food-stamp debate in Congress. Why has the program grown so rapidly over the past few years to the point where 47 million Americans, one-sixth of the country, now receive food stamps?”
Depends on where one is. In some areas Wally World is the only large grocery store around. You can find almost anyone shopping there. In other locations that are more options and people shop by price.
I can see Obammy and Soros in a meeting on how to cripple the World Economy. “We must cripple Wal-Mart to achieve complete control over the economy. I’ve got it! Raise the minimum wage and force them to provide Obamacare care! It will kill their profits overnight!”
“BTW I sent you another check and am working on destabilizing some other governments so you can intervene and start another war you can’t afford. Just increase taxes to pay for it. Soon my son, the Middle Class (your only opposition) will be decimated, homeless, without food, and weak if not dead. Then and you can rule as you please, unopposed”
“Yes Master. Thank you Master”
If Wal-Mart isnt doing well, the REST of the economy isnt doing well.
Not to worry. Recovery Summer 5.0 will fix everything. Happy Days will be here again soon. Let the good times roll. /sarc
Around here, there's a local chain with better prices and better quality.
the trick is to go there in the morning since most of them don’t get up until noon.
LOL!!!! But I’m sure there’s a lot of truth to that.
Just can’t bear to go near our local Wal-Mart and tried out a store now owned by Safeway last night. If their sales are up I would have to say it is because the cost of their groceries are up. Buying fewer and fewer items each week and the cost keeps creeping upward.
My county has 30,000 residents. 6,000 are on SNAP. If they get SNAP, they get TANF, AFDC (or its equivalent), Section 8, EITC, ObamaPhone, heating assistance, electricity assistance, food banks, and all the other giveaway mess too.
You can drive by most any trailer in the county and the cars are there every morning until 10 or 11 AM....they can’t get up earlier than that because they are cranky when it’s that early. It upsets them.
The best time to go shopping at WalMart is in the morning before they wake up.
That's why Walmart opened grocery stores, to get on the government gravy train.
Their teriyaki beef jerky, honey-roasted peanuts, flavored waters and some bakery goods are top notch, better than any name brand imo. Most other stuff is junk like their soups which are 2c cheaper than same size Campbells but markedly inferior in quality.
More crony capitalism.
Essentially tax payers are subsidizing Wal Mart’s profits by providing things called “benefits” to Wal Mart workers, and cash to Wal Mart customers
Same here. I stay as far away from our Walmarts as I can.
20% of US residents, including legal and illegal immigrants are on food stamps.
“I can see Obammy and Soros in a meeting on how to cripple the World Economy.
We must cripple Wal-Mart to achieve complete control over the economy. Ive got it! Raise the minimum wage and force them to provide Obamacare care! It will kill their profits overnight!
Makes one wonder how much the anti Walmart Trolls on FR get paid for each of their posted anti Walmart whines.
There has been no cut in food stamps. The “cut” was a reduction in growth and hasn’t gone into effect yet.
“More crony capitalism.
Essentially tax payers are subsidizing Wal Marts profits by providing things called benefits to Wal Mart workers...”
Yep. And there are people who will say...Why not? WalMart should take advantage of every angle the government is willing to give them....yadda yadda.
I’m getting a bid tired of subsidizing so many people and so many corporations. :)
If you think food stamps are a waste, your biggest problem is not the Left nor the welfare class. It’s the army of K Street lobbyists in the employ of Armour, Kraft, Heinz, Campbells, Kroger, Safeway, Walmart, Piggly Wiggly, etc. etc. etc.
Buckeye, you win post of the day :-)
The fed has pumped trillions into the economy and credit is ‘tighter’? I don’t understand that.
In addition to that fact is the fact that the number of people on food stamps has increased exponentially, so Walmart complaining about food stamp cuts makes no sense whatsoever. Their customer base purchasing with food stamps should be increasing, not decreasing. Of course, it is very probable that a lot of the food stamp money is being used to buy burgers & fries at McDonalds & Burger King as well as food at convenience stores. It has been my observation after having worked with welfare recipients and others with low incomes that most of them have no clue about how to stretch their money to get the most out of it. You can easily witness this fact at any Walmart at the beginning of the month when they have their food stamp money. Check out the carts. The overwhelming number will be filled with convenience foods, snacks, sodas, sugary cereals, and expensive meats. Very few will have actual staples in their carts such as rice, beans, or potatoes. If Michele Obama was really interested in Americans cutting back on the crap and eating more healthy diets, she could easily start by having her husband mandate (by executive order of course as he typically does) that recipients of food stamp money can no longer purchase fast food and junk food with their EBT cards. But that's not gonna happen. They won't want to get their base mad at them.
I think the Execs at Wal-Mart are covering their asses for the Wall Street analysts, which is typical for publicly traded companies that miss forecast.
Perhaps-—but the cut in food stamps was only 1%.
Since Wal-Mart sells many, many, many items that are not eligible to be purchased with food stamps, I think this is a bogus calculation.
I see people at the local Family Dollar purchasing items with food stamps that are more expensive than Wal-Mart.
Only reason I go there is for milk. It is closer than Wal-Mart. About 12 miles closer one way.
Ding ding ding... we have a winner.
My “give a crap” capacity for freeloaders is exhausted.
That's almost the situation in the town near me - Smith's is their only competition, and they do a good job - especially in the produce department.
If the Bolshies knew it was this easy to destroy Wal-Mart, they would have cut food stamps more before.
Folks need to look around for opportunities to purchase their groceries. Sometimes you have to shop where you have to shop
The worlds largest retailer, which gets more than half its sales from groceries, on Thursday gave a disappointing full-year forecast. It blamed sharp cuts in food stamp benefits and higher payroll taxes that will hit disposable income for its core customers. Wal-Mart shares fell 2.2 percent in morning trading.Good old al-Reuters could not evade reporting the truth here while trying to hide it in plain sight.
To combat sluggish sales, broaden its customer base and fend off aggressive rivals, Wal-Mart said it was doubling the number of smaller new stores it originally planned to open this year. [ ]A company that is truly in retreat would not blow a significant piece of capital on such aggressive expansion.
Wal-Mart now plans to open between 270 and 300 small stores this fiscal year, in addition to the 346 currently in operation, and is spending an extra $600 million to do so. It had planned to open 120 to 150 new small stores this year. Wal-Mart operates 4,000 super-centers.
Safeway just shut down all its stores in Chicago, so of course their sales figures are up. What a dumb comparison...or intentionally misleading.
Spot on. It’s a gravy train, literally.
“Safeway just shut down all its stores in Chicago, so of course their sales figures are up. What a dumb comparison...or intentionally misleading.”
Apparently, Safeway is looking for buyers, and they will be selling separately their successful gift card program for other merchants/stores.