Because of Wal-Mart’s sheer volume and scope, economic analysts pay close attention to Wal-Mart sales revenues. Wal-Mart sales revenues are used as an indicator of consumer spending and also the health of the economy. Many sales reports coming from leading retailers have been meeting expectations. An April jobs report shows more hours, more pay and a lot more hiring. Right now, Target sales are up while on the other hand, Wal-Mart sales are down. But officials from both of the companies are saying the consumer comeback that many are hoping will drive the U.S. economic recovery from the Great Recession may not be sustainable.
Article Resource: Wal-Mart sales revenue clouds U.S. economic recovery predictions
Sales report for Wal-Mart
Wal-Mart, the world’s largest retailer, averages a lot more than 100 million shoppers each week. Shoppers who spend extra cash give the store more than $ 400 billion in annual sales. CNNMoney.com reports the Wal-Mart sales report actually shows revenues worldwide rose 6 percent to $ 99.1 billion, which beat analysts’ forecasts of $ 98.45 billion. However, sales at Wal-Mart stores open at least a year — a key metric of retail performance called same-store sales — fell 1.4 percent within the 3 months ending April 30. In the very same period a year ago, same-store sales rose 3.6 percent. A 1.6 percent decline within the fourth quarter is what these sales are following.
Wal-Mart 2010 sales revenues
The fourth quarter of dragging US sales were reported by Wal-Mart sales report logs. The Wall Street Journal reports that Wal-Mart forecasted that its U.S. sales would continue to be sluggish this summer when taking into account the working-class customers who form Wal-Mart’s base still reel from the effects of the recession on their finances. The Wal-Mart customer's outlook are clouded a lot more by unemployment and rising gas prices heading into the summer.
Target sales revenues
Wal-Mart sales revenues and their contrast to Target sales revenues say something about the U.S. economic recovery in 2010. Target reported that they increased 29 percent in their income in the first quarter. The Associated Press reports that Target’s sales revenues rising are actually a sign that the retail chain is drawing customers from competitors like Wal-Mart. However, during a conference call to a couple of different investors, Target Chairman and CEO Gregg Steinhafel said “Clearly, the economy and consumer sentiment have improved since the weakest point in 2009, but we believe that both are still somewhat unstable and fragile and will likely continue to experience occasional setbacks as the year progresses amid a stubbornly high jobless rate.”.
2010 US economic recovery
Target, which has managed to brand itself as a Wal-Mart-type discounter with a little bit of style thrown in, took a hit during the Great Recession. As cash-strapped Americans left supermarkets and department stores, Wal-Mart's sales and profits rose during the recession. Wal-Mart appears to be losing the customers it won during the downturn as the economy gets better. Based on sales figures, many of those customers have taken a baby step up to Target.
U.S. economic recovery predictions
Wal-Mart might just start having to pay if they want US economic recovery to be sustainable. The CNNMoney.com article notes that retail sales expanded over the last seven months because 40 percent of current spending comes from 20 percent of the highest incomes. Plus, events like the stock market Flash Crash and European debt crisis have caused the rate of the retail sales increases fueled by the more affluent households has slowed since March.
US recovery is strange and long
More work and money is going to be needed by Wal-Mart's customer base if they’re to shore up the sputtering economic recovery. The U.S. unemployment rate is stuck at nearly 10 percent, the underemployment rate is increasing a lot, wages decline for individuals who can find any kind of work and inflation-adjusted income is flat. With the current rate of economic growth it will take at least three years to bring the unemployment rate down to be below 6.3 percent, where it was at the peak of the 2001 recession.
Headwinds US economic recovery
The retail sector’s outlook, Wal-Mart’s troubles, and the health of the economy at large are facing what Sandra Pianalto, the president of the Federal Reserve Bank of Cleveland, calls a “powerful headwind.” As reported in the Washington Independent, Pianalto said a heightened sense of caution is driven by deep uncertainty the standard of living Americans had become accustomed to will return. Those who began their careers in the mid-1980s have experienced mostly prosperity with the exception of two very brief downturns. Now expectations have shifted as a result of this long and deep recession.
Additional information at these websites
CNNMoney.com reports
http://money.cnn.com/2010/05/18/news/companies/Walmart_earnings/
Wall Street Journal reports
http://online.wsj.com/article/SB10001424052748703957904575252092724864622.html
Associated Press reports
http://www.google.com/hostednews/ap/article/ALeqM5j8Dci3cCwl1keQZphuso3G1zEb0wD9FQ5I6O1
As reported in The Washington Independent
http://washingtonindependent.com/85251/fed-president-predicts-a-long-slow-recovery
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