Leaning Lamps, Used Vaporizers And Wal Mart

A Wal Mart opened five-minutes away from my place earlier this year and I had to go see what it was like. The purchased items left me wondering how the retailing behemoth had ever become so dominant: the floor lamp had an uncontrollable lean after three months, the dresser began losing paint around the edges within weeks, and after bringing a vaporizer home and taking it out of the box, I discovered that it was a returned item with soot around the nozzle and water droplets still inside.

So when Wal Mart reported this weekend a decline in November same-store sales, I nodded in agreement. Confirmation! But stock markets didn’t see it quite that way. They sold off sharply in large part on the view Wal Mart’s troubles reflected a deteriorating environment for the retail sector as a whole.

Is the slippage a Wal Mart thing or a sign the U.S. consumer is finally knuckling under? Many of the commentators on the November sales miss thought it was Wal Mart-specific:

* Mad Money’s Jim Cramer said on his radio spot that it’s just a management issue.
* Marc Gerstein at Reuters says in ‘As goes Wal-Mart, so goes Wal-Mart (again?)’ that shoppers are merely switching to other stores.
* Vitaliy Katsenelson at Contrarian’s Edge says Wal Mart needs to upgrade its stores and merchandise.
* Blogger Steve Olsen says in '10 Reasons Target is Better than Wal-Mart' that “I’ve Never Seen Anyone Wearing a NASCAR Shirt, Purple Sweat Pants, and Pink Fluffy Slippers at Target.”

But that may not necessarily mean the US retail sector and economy are doing fine. Actually, with the U.S. housing sector collapsing, it would seem they are destined to pull back. Perhaps the Wal Mart miss is a combination of self-inflicted and macroeconomic factors.

Comments

[Paul Meisel:]

I seldom go to Wally World, but often to neighboring stores in a couple plazas they anchor near here. My wife refers to their customer base as "the people who don't own mirrors" and "the women without sisters".

I won't take my dog out in the yard dressed the way some folks dress there -- and I am not a fashion plate.

2006 Nov 29 06:07 AM

[Don Leo:]

I look for bargains at Wal-Mart. I found two interesting thoughts. One. Except for food roughly 80% of what they sell will wind up in the land fill in the next five years. Two. Many of the people who work their are scared. I spent 15years working retail stores and I know fear in a persons eyes when I see it. There is something wrong with this company. I can joke or kid the clerks at Sears, or Target or Michael's Or Costco. But not at Wal-Mart. Has anybody else felt this, or maybe I am just Paranoiad.

2006 Nov 29 07:24 AM