Walmart Earnings Disaster Exposes a Collapsing Economy: Davidowitz

reply to post by arjunanda


Target is down as well, investors.target.com... we wont find out this quarterly statement from them until the 21st but last quarter was a bad quarter for target and today target stocks fell perhaps in anticipation of another bad quarter from them.

ycharts.com...

Costco was up last quarter though....but that is not where all of target, walmart and sam's club money is going though....

People think sales are up in other areas but I am not seeing it. Local stores everywhere seem to be struggling.

I think that people are avoiding more expensive foods, and trying to find any way they can to save money, which means the economy is, as you say, taking a very serious downturn.

Couple things. Walmart has horrible customer service. They always have huge lines and only believe in having two registers open. TWO when there are 20+ people waiting.. and they each have a cart packed past the rim with groceries.. When you complain they just shrug.

Wally world is dirty.. very dirty...

Their produce is crap, as is their meat.

They open up six super walmarts in a city that has a 250kish population.....and they all suffer of the same problems.


couple in their shady pratices and that just made me stop shopping there. Not to mention the people of walmart

I have been going to a more regional store even though the prices are a bit higher. I like the atmosphere and the customer service so it is worth it to me. I also stopped buying produce at a big store and partnered up with a local grower. Whatever I don't get from them I grow myself. I hardly find any reason to go to walmart.

i figure many people are starting to do the same.

i am a frequent Wal-Mart shopper and I am very happy with Wal-Mart.
Even though the actual sales did not meet the supposed expected sales growth, It's still nice to have
the consumer goods available. It tells me that there is more than enough resources available. Now if only
the goods could be distributed to other parts to where there is a need, then there would be a raising of others living standards. However that is another can of worms.

It would have been neat to be there at the start when Mr. Walton began. Much before my time.

reply to post by peter_kandra


I haven't been to the local Walmart in years. Haven't missed it! It worries me that Walmart is a barometer for
the economy, though.

Some posters wonder why the big deal if Walmarts earnings per share are down by a penny and sales are off by 2%?

The big deal is multiply a penny times the millions of shares out there... it adds up quick and shares are based on profits. Shares going down means profits are down... gross margin is down. That means the cost of doing business and the cost of goods are going up.

For instance, the cost of a jar of mayonnaise or a weedeater goes up, but to stay competitive Walmart holds it's retail price the same eating the loss. That in turn eats into profits.

So what do you do to cover the loss and maintain profits and margin? what is the one controlled cost you have as a business? Lights? Refrigeration? Floor maintainance?

Nope... it is labor. Payroll. A relative and his entire night shift got laid off from a new Walmart store in a nearby town. Walmart is doing away with the 3rd shift stockers instead going to early day shift stocking. They inturn become stockers/ customer service... stock shelves and work the floor... thereby cutting out a few people/ positions no longer deemed necessary.

Going back to the shares... a decline for Walmart that promotes itself as a cost cutting, budget minded store for the consumer... this is big in this economy. Consider that grocery costs... all costs have gone up, yet overall retail sales are down and Walmart should have low income, low mid class, struggling consumers flocking to it's stores... this is big.

This is millions of dollars lost in sales and profits for the largest retailer in the world.... as well as share holders. Most retailers want more than 2% growth. Generally, 3-5% is the norm per year and is even anticipated and worked into the monthly budget per retail location.

If this projected sales increase is not met, then the store starts running at a deficit... losing money. This then eats into profits and margin even more.

People are not hired or replaced. Renovations and equipment are not purchased. Instocks are tightened and orders are put on hold. Fewer trucks are run which tranlates into fewer truckers, warehouse labor, local maintainance is cut... electricians, plumbers, grounds keeping goes to biweekly, ...

all of these lost wages are then seen at the local grill before the truckers head out, no grass cutting means no gas sold and no coffee for the crew or snacks... no equipment orders means no steel for cardboard balers, no steel sinks in the food courts, no ovens in the bakeries, fewer orders means fewer mowers in the garden area, etc.

Multiply this by thousands of stores and dozens of distribution centers/ warehouses... and this is not good for the economy.

Next we have thousands of ex part timers looking for the fewer and fewer available part time jobs. A flooded labor market means lower wages to get workers in the door of another part-time establishment.

And realize now that all of these folks HAVE to have insurance under Obamacare no matter how young and healthy and unable to afford it... and we have a wonderful economic enviroment.

Realize too that inorder to make Walmart more profitable, more of the teams become part time or even temporary... inorder to flank the Obamacare rules.

reply to post by arjunanda

-John Williams of Shadow Government Statistics would put the "real" rate of unemployment up around 23 percent after adding in all workers that have given up looking for work and all underemployed workers.

Depends on who's numbers you want to look at for the unemployment figures...But IMO those who have no money for anything don't buy at even Walmart.

Originally posted by Vasa Croe

Originally posted by benrl
This and the Hindenburg omen being triggered, might be up for some interesting economic times.

Ummm....yeah and the number of times it has been triggered. Looks to be a hard time coming.

Source

Wall Street's chart gurus have spotted the ominous "Hindenburg Omen" in the stock market today.

Today's sighting is the sixth one in just eight days, and that's pretty significant for folks who believe history repeats itself.

It's extremely rare to see as many Omens occurring together as we've seen over the past 50 days. The last time was prior to the bear market in 2007. The time before that was prior to the bear market in 2000.

edit on 8/15/13 by Vasa Croe because: (no reason given)

Art Cashin= "Art of Crashing??" Ahahuehuhua!

Doomers will argue that this only supports their case for a major 1987-style sell-off. But Art Cashin warns that this obviously isn't a sure thing.

If Walmart collapses, that means Kelly Services, a temp agency, would then become America's largest employer.

Hell of a recovery, aye?

washingtonexaminer.com...

reply to post by arjunanda


I am expecting the other shoe to drop any day now but the truth is I've been expecting this since 2010 and it probably would have if the big banks, government and the likes were not fudging the books so much! Nothing is
as it seems, the markets are infusing their own corporations with profits and borrowed monies. The US government and media keeps telling us "all is well" and "we are in a recovery"! There is weakness at every turn and there are no more bubbles that can prop this sinking ship back afloat! When this final bubble burst there will be nothing left to prop it up with but the blood pumping through our veins! I predict there will be global wars with possible limited nuclear responses and massive terrorist attacks as fears abound with our fight and flight instincts kicking in!
God help us if I'm right this time!

Originally posted by nosacrificenofreedom
reply to post by arjunanda

 

I am expecting the other shoe to drop any day now but the truth is I've been expecting this since 2010 and it probably would have if the big banks, government and the likes were not fudging the books so much! Nothing is
as it seems, the markets are infusing their own corporations with profits and borrowed monies. The US government and media keeps telling us "all is well" and "we are in a recovery"! There is weakness at every turn and there are no more bubbles that can prop this sinking ship back afloat! When this final bubble burst there will be nothing left to prop it up with but the blood pumping through our veins! I predict there will be global wars with possible limited nuclear responses and massive terrorist attacks as fears abound with our fight and flight instincts kicking in!
God help us if I'm right this time!

They can't even unwind QE without major disruptions, even the suggestion sends tremors. All the hundreds of billions of dollars a month in QE globally, and the result is still anemic economic growth. It is however building bigger and bigger bubbles, the wave that otherwise would of broke into a whitewash by now is growing bigger and bigger and bigger into a huge tidal wave that will crash hard.

I live in a small farming town, our choices for groceries are Safeway and Super WalMart. Over the last few months I've noticed that Safeway is *severely* under-staffed, and WalMart no longer offers Deli samples, the checkouts are undermanned, and they seem to only stock in the morning. They also seem relatively understocked. I've been wondering if these signs were indicating anything. I think the article linked in this thread has my answer.

Just a few thoughts from me on Wal Mart.
One, boycotting Wal mart based on its business principles is fine as long as you do the same with Target, Sears, K Mart, all the major department store chains, supermarket chains, big box electronics stores and home improvement stores as well as all restaurant chains. They all pretty much use the same practices and target the same customers and ran the little guys out. No arguments ... they do. Wal mart was just the best at it, it wasn't even the first to do it.
I see problems at Wal Mart. They have definitely hurt themselves. They aim for lower income shoppers and make themselves inviting targets for thieves and shoplifters. Not having enough staff compounds this. Cutting hours to get maximum bonuses for management hurts sales. They see reduced sales so they cut more hours and sales continue to decrease. Panic time! but the problem is that too much control is managed from Bentonville and they have a one size fits all store planning strategy. So some stores( better ones) get screwed and lose sales while others( the problem stores) do marginally okay or at least don't do as bad as they did.
But I know that Wal mart lobbied with the feds and is cooperating with them and they make a very useful ally in distribution and marketing to basically the whole country. if the economy collapses( and its going to) you'd want Wal mart on your side and would keep them around. Many of the biggest industry leaders and powers have done the same. The feds keep them alive, the y keep the feds alive. Partners in crime. If you need to get bread and pop tarts to starving people, you'll have Wal mart doing it.