Sales by U.S. stores open at least a year fell 1.6 percent in the three months ended Jan. 31, the Bentonville, Arkansas- based company said today in a statement. Wal-Mart (NYSE:WMT) had projected sales to decline no more than 1 percent. The retailer reduced prices on laptop computers, along with turkeys and cranberry sauce for holiday meals, as job losses crimped demand.
"Price deflation is hurting sales" was one of the comments they made.
Price deflation, eh?
I can confirm this is everywhere. Places that I don't expect to run sales at all are. Big time: 2-for-1 (what is called "bogo" in the business, or "buy one get one"), 70% discounts and other similar schemes. The local Publix (OTCPK:PUSH) food retailer has, over the last couple of months, stepped up big with the discounting in what is pretty clearly an attempt to keep people in the stores.
Over President's Day weekend I was traveling and stopped in a significant regional mall. It was dead. Really, really dead. This same mall saw me over the holiday and at the time it looked like any ordinary weekend. This time, which was an "ordinary weekend", you could have fired a howitzer "up the middle" with the only casualties being the $40,000 cars they had parked in the walkways to try to entice people into even more conspicuous consumption (without apparent success, I might add).
Bloomberg's story reports a 1.6% decline in same-store sales, but fails to mention the 2% decline in US stores. Oops. AP's story leads with a "profit rises 22% in the 4th quarter!" screamer, but as usual the mainstream mess neglects to include in the first line of copy that this is expected, since the last quarter of the year includes this holiday we call Christmas.
So we have a bottom line beat and the top-line looks decent, but it's all new store adds (which of course cost money to put in). Same store sales, which AP also neglects to point out, fell 2% in US stores, were weak - and below expectations.
The pundits all are trying to spin this as "oh that's just their demographic", while forgetting that the majority of American households are in Wal-Mart's "demographic" - that is, anyone other than Wall Street banksters who managed to asset-strip off tens of billions in bonuses last year.
Out in the real world, Americans are just as broke as they were a year ago, and perhaps more so. Job prospects stink and the economic picture is not bright - unless you're a bankster or their cronies in the mainstream media, of course.