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If you want to know whether high energy costs are hitting low-end consumers, there's no better proxy than Wal-Mart (NYSE:WMT). The retailer is so huge that on a quarter over quarter basis there's not much the company can do to influence overall sales, so the variance is due to macro factors -- like gas prices. And Wal-Mart's sales doesn't just tell us about the U.S.; high energy prices and Wal-Mart stores are both global. So Wal-Mart's sales tell us about the impact high energy prices are having around the world, and particularly in the U.S. where Wal-Mart has the most stores and generates the largest portion of its sales.

The information is particularly telling because Wal-Mart caters to the people who are most impacted by high energy prices. The lower a person's income, on average the larger the percentage of income that person devotes to energy costs.

The counter argument is that high energy prices will drive middle income earners out of higher end stores and into Wal-Mart, thus actually boosting Wal-Mart's sales. If that were the case then it should show up in the overall retail sales data. Though retail sales have been more volatile than usual, they are increasing at a steady rate over the past several years.

I think it's clear from Wal-Mart's same store sales increase of 3.8% in the U.S. that the current gas prices still aren't high enough to shut down the low-end consumer. And if they're not stopping shopping at the low-end, then gas has to be having even less of an impact moving up the income scale.

There just aren't any economic indicators pointing to gas and other energy prices having a major impact on consumers. That is surprising. It would seem that gas prices are high enough to matter.

I suspect there's an underestimated demographic explanation. The reality is people don't have to drive far, if at all, to get to low paying jobs. It doesn't make much sense to make a long commute to get to job paying say $8 to $12 per hour, because jobs paying that rate are available everywhere. Consequently, this group may use very little gasoline. There are exceptions, of course, but on average this seems to make sense and it's something that's not being considered by the popular literature.

I wouldn't count the consumer out just yet.

Source: What Wal-Mart Sales Say About the Impact of High Oil Prices (WMT)