October 29, 2006

Is America's housing crash taking Wal-Mart down with it? Wal-Mart posts worst sales performance in years


After they announced their dismal September results (sales not keeping up with inflation), I posted this over on the Wal-Mart board (feel free to chime in there as well):

Think of all the illegals (the Wal-Mart customer) who no longer have work building houses

Think of all the lower middle class families with ARMs resetting who can no longer afford anything beyond basics as they try to keep their homes

Think of all the middle class folks panicking because that wealth they thought they had in their homes just disappeared

America's housing crash will end up crashing Wal-Mart

Here's the announcement. Wonder how the market will take this Monday?

Wal-Mart reports weakest monthly sales in years

Wal-Mart said sales at established U.S. stores rose an estimated 0.5%, far off the 2-to-4% gain the company originally forecast for October.

On Oct. 23, company executives pared back their rosy outlook, saying that October same-store sales would be closer to September's figure of 1.3%.

The 0.5% same-store sales figure for October is the weakest since the 0.3% rise posted in December 2000, according to the Wall Street Journal.

Wal-Mart executives blamed the weak October figure on weakness in sales of women's apparel, as well as disruption to sales from remodeling efforts at almost half of its U.S. stores.

49 comments:

Speedy Gonzalez said...

"Think of all the illegals (the Wal-Mart customer) who no longer have work building houses"

Hey, check this out. Take _Housing Panic_ and remove the O, U, N, & G. Now, reverse the S and the I and you get -- HISPANIC!

Pretty cool if you ask me.

Ariba! Ariba!

Anonymous said...

Quote: "The 0.5% same-store sales figure for October is the weakest since the 0.3% RISE posted in December 2000, according to the Wall Street Journal."

Well, we still talking about a RISE in sales. Big locomotives dont stop and go into reverse instantly. People are trying to keep up spending behaviour-patterns, since "going to the mall" also fills the need of social activity and personal hobby for many.

Anonymous said...

"After they announced their dismal September results (sales not keeping up with inflation), I posted this over on the Wal-Mart board...."

You are a freaking moron. Sales not keeping up with inflation???? What the hell does that mean???
How are gross porofits? Is that what you mean?

Sheezzzz, no wonder EVERY financial invest/prediction you made was wrong. EVERY, or am I just not keeping up?

Anonymous said...

Anonymous said...
last anon - and inflation was what?

Shut up kieth. Idiot

Anonymous said...

last anon - and inflation was what?

keith said...

uh, idiot anon - if you own a chain of general merchandise stores, and you get a 0.5% increase in sales, but inflation is running at 5% and is representative in the goods you sell, that means your sales actually dropped 4.5% vs. the year before when adjusted for inflation.

Pretty basic stuff, I guess you prove the lack of financial education in America today

What we don't know yet from Wal-Mart is their profit margin or profits on their poor sales. But we do know they just shocked the market with that 0.5% reading

Anonymous said...

Won't Wal-mart still have an advantage, long-term? They have a better supply chain than most, and have bottom-of-the-barrell pricing, so as the middle class gets hammered, won't they step down from more expensive retail options? In other words, the lower classes retrenech and stop buying and start stealing, while the middle class loses its illusion of prosperity and shops wal-mart.

Not saying wal-mart is a good buy here, just that it's still safer than most realize.

Caught you, you idiot said...

Anonymous said...
Anonymous said...
last anon - and inflation was what?

Shut up kieth. Idiot

Sunday, October 29, 2006 9:19:00 AM


Anonymous said...
last anon - and inflation was what?

Sunday, October 29, 2006 9:57:22 AM



Kieth are you posting fake conversations using the Anonymous ID?

Just trying to figure out how it is some one was able to quote a man that posted 40 minutes after him...

Anonymous said...

uh, idiot anon - if you own a chain of general merchandise stores, and you get a 0.5% increase in sales, but inflation is running at 5% and is representative in the goods you sell,

here is where you are wrong....

Lets say WE HAVE DEFLATION SINCE LAST THE THREE MONTHS IN THE COST OF MANUFACTURING - we do. You can drop your price or hold them steady, yet your profits will surge.


Those of us that buy the basic materials to manufactor goods will tell - and I am telling you. That prices dropped in the past few months.

I will also educate you on this. The margin between sale of goods and cost of goods was at it's highest ever because of the fear of inflation. So lower the cost of goods while at the same time removing the fear of inflation creates oppertunities all around. The seller feels rich becomes of increase profits per sale. The consumer believes he is getting a great deal because the prices are lower.

Is Walmart a good buy now? Don't know, don't care. But what I do know is you don't know squat about economics.

Metroplexual said...

Keith,

In retail they actually look at profit per item. Walmart has actually not been performing well in this regard due to their business model which is bully the vendor into lowering their price. So that is why they have been remodeling their stores in the likeness of Target which has been very profitable on their per item basis.

Walmart has gone as far as to hire designers and have opened an office in NYC like the other chain department stores to get fashionable merchandise (which is more profitable). The problem that they have is that it will take years to get away from the image that people have of walmart as that ugly store with the cheap and ugly merchandise.

Patch Tuesday said...

You might also take note that Wal*Mart has been gutting the experience from their workforce to save money on payroll and raise their stock price. Their logic is why pay the same person, that's been there 10 years, twice as much to do the same job as a newbie they can bring in off the street. That said, I'd love to see someone prove it's not showing up in their customer service (trying to check out at the register etc).

Patch Tuesday said...

Forgot. Of note also are the facts that they've been weeding out their workforce by imposing broad job descriptions on all employees. For example, the last 10 years you may have worked in the cosmetics dept, and have a bad leg. Now you're job description also says you'll go into the parking lot and push a train of shopping carts. Can't do it? Hit the road!

Next they've been using a central computer at their headquarters to schedule the shift hours instead of allowing it to be done at the store level as in the past. This is also tied into what is called employee availability. In the past you may have said I can work everyday but sunday between 12 noon and 9 pm. Now if you don't have 100% availiability during the entire time the store is open, they are whacking your hours. Instead of 40, you now get 20. And the people willing to work 40 can't manage child care, because their shift hours are all over the map and change weekly...

Metroplexual said...

Patch,

I have read some of that but I was not aware of all that other crap. Time to stop shopping at Walmart! Besides who chooses Evil Otto as their logo?

http://en.wikipedia.org/wiki/Berzerk

Patch Tuesday said...

I've got some relatives that work for them and lets just say their lives are becoming pretty stressfull...

Patch Tuesday said...

I like their healthcare too. Most people don't realize, but what they save by shopping there, they are largely giving back in tax dollars to prop up Wal*Marts lack of benefits. Maryland did a study and conclued that the average company their size was paying 8% of their profits towards employee health care. Walmart is only paying 5% and many of their workers subsequently didn't have health insurance and just use state resources. Maryland went after them with a new law requiring they up that amount, but I think it was recently overturned in the courts.

You'll see all that "new, improved" healthcare crap in the Wal*Mart press, but ask someone that works there what the deductibles are?

Metroplexual said...

I have been following the healthcare thing in MD a bit. Walmart up until last year used to just suck up the negative press as per Sam Walton's advice. But now actually have a "war room" devoted to going after any and all negative press. I would not be surprised to see one of their attack drones hone in on this thread.

FART said...

Patch Tuesday,

I don't give a rats ass about your claim of relatives working for Walmart. Fact is it is a blatent lie about the health care crap at Walmart. The Democrats designed a law to go after one and only one company. THIS IS ILLEGAL DISCRIMINATION. They knew the law was a violation of the Constitution. They knew it would never clear.

THEY ALSO KNOW YOU ARE A FREAKING IDIOT. They know they can now claim they were on your side and the Republicans are against you.

The fact is Walmart does provide extrodenary health care benifits. Far more than most companies.

Many companies deuct $35 to $50 out of a man's pay check to provide $1,000 deductable care. Walmart deducts $5.00 to provide total coverage.

ALL THE CLAIMS YOU EARD by the Democrats and that retard in your family that greats the folks at Walmart are a lie created for political purposes.

I would never vote for a clown that strives to maintain power by lying to th people.

Vote for Ehrlet and Steele

Patch Tuesday said...

Hey Fart, the Walmart genius! Do some research and come back and tell us how much money California spent in a recent year providing healthcare for Walmart workers? I read 70 million; what did you read?

And Fart, please provide full details on this $5.00 total health care coverage plan?

Patch Tuesday said...

Here you go Fart about the hours:

http://tinyurl.com/yx47um

Patch Tuesday said...

Oh, and hey Fart, can you also tell the audience about the recent salary caps they imposed on the workers?

Patch Tuesday said...

Sure Fart, hit somebody working for wages at the poverty level with a $1,000 deductible and call yourself a Saint...

http://tinyurl.com/ydhfzw

OUR VALUE PLAN
The Value Plan covers health care expenses even before the $1,000 medical and $300 prescription medicine deductibles are satisfied. The moment coverage begins, it covers:
• Three in-network doctor visits per covered family member, per year—each for
a $20 copay, and
• Three generic medications per covered family member, per year—each for no
more than a $10 copay.

SeattleMoose said...

Wal-Mart is a cancer. Their business model is the most predatory and destructive of any large corporation. As an outlet for "Made In China" a few Walton family numbers make obscene profits while their workers make peanuts, they drive out local businesses, and in the end....America loses.

But the "allure of cheap junk" keeps them afloat. Until Americans can see past the price to the real "Price", Wal-Mart will continue to sap the blood of America like a large parasite.

Metroplexual said...

I bet fart is one of the war romm hitmen.

Patch Tuesday said...

Hitmen? More like Misinformation Minister...

And, just think, these people have more money than the NAR to spend on propaganda...

FlyingMonkeyWarrior said...

Banned Wal-Mart Advertisement Targets Gays, Lesbos, and abortion advocates.

Must see.

http://tinyurl.com/y44lzg


Also, don't worry about Wal-Mart, they just spent around a billion opening stores and warehouses to ride China's boom to the top.

Aaron Krowne said...

I still can't get over how when I went to the closest Wal-Mart to me (which is 10 miles away since I live in the city), it was like I had just landed in Mexico city.

Wal-Mart is going to be hurting from this downturn.

This is why they are courting a slightly-more-upscale image: their ultra-cheap consumer base is the one most at risk. They need to focus now on catching "middle-class drop-outs" who won't be able to afford Target anymore.

trailer trash said...

Am I the only one who is having posts repeatedly removed?

keith said...

on the timestamp, we did daylight savings today but ahead of the US right? It's so confusing. I did go today to the royal observatory in grenwich england where "time was created".

Kind of like going to the Federal Reserve to see "where money is created"

Both are kinda funny

On posts being deleted - you get deleted if you threadjack, swear, threaten or use racist language. Other than that it's a free-for-all here at HP, unlike Ben's paranoid blog where he censors every comment

On Wal-Mart, HP poll - yes or no answer:

DO YOU SHOP AT WALMART?

Anonymous said...

On Wal-Mart, HP poll - yes or no answer:

DO YOU SHOP AT WALMART?


Not just yes, hell yes! Wal Mart is great! I here people say all the time that Wal Mart is bad. They arn't bad, they are good. Wear else can u get three pairs of underwears for $3.95?

Anonymous said...

So, what happens to StarBucks when US housing market slowdown? Starbucks plans to expand its store operation in China in the next few years. Any guess what US housing market links to Starbucks future earnings?

FlyingMonkeyWarrior said...

YES to shopping at Wal-mart.
I like to buy walls.


heheh

AmazingRuss said...

"I would never vote for a clown that strives to maintain power by lying to th people."

You don't vote then, do you? Either that or you're a gullible twit.

Anonymous said...

"Wal-Mart executives blamed the weak October figure on weakness in sales of women's apparel...."
+++++++++++++++
I'm not surprised at all. I went on a shopping tour of Wal-Mart, Target and Fred Meyer the other day looking for inexpensive clothing, and I was stunned at the huge quantities of crap I encountered. Most of it was poorly constructed, polyester separates styled for teenagers. This junk will either shrink or disintegrate after a few washings. It's a real race to the bottom in value for clothing from China and the rest of the Far East....

Westchesterchick said...

Walmart - Yuck! I have no idea if Target treats their folks any better - but at least you can find people to help you at Target that don't look like they work there due to welfare reform. Also Target employees occasionally smile. You never see that sh*t at a Walmart. Also Walmart stores are always this ugly beige color and stuff is strewn all over the place.

whydibuy said...

But did you notice, Keith, Walmart is at its 52 week high after a great run from summer? Looks like wall street sees good times for WMT going into '07.

GK said...

Wal-Mart is the low cost retailer. If you think that we are heading into a bad recession, then Wal-Mart might not make much money for a while, but their position will strengthen considerably vi se vi their competition. K-Mart/Sears, Target, etc. will suffer more then Wal-Mart. In a long run, a recession is good for Wal-Mart business.

GK

Colin FitzGerald said...

I have heard stories of how BerlinWalMart treats their employees. I will never shop there. They are corporate gangsters.

Anonymous said...

I shop at Wal Mart because they have the most miserable employees. I like that in a servant.

Anonymous said...

W-M can fix this problem! They just need to add lots of fags to the Board of directors and store management. Then they can develop that special buggery-scented esprit de corps like all the other big retailers.

The profits will flow like water!

keith said...

"But did you notice, Keith, Walmart is at its 52 week high after a great run from summer?"

watch what happens tomorrow

Anonymous said...

WalMart (and most of the other big boxes) will be severely screwed as peak oil gets underway- yeah they have a great supply chain, but unfortunately it's completely dependent on cheap oil... they ship tons and tons of crap from china to our shores, and then truck it all over the country in gas chugging big-rigs. The dirt cheap prices leveraged from the bulk movement of these goods must go up... after gas goes to 3-4-5 dollars a gallon and beyond this business model will collapse.

Alan P. said...

You are wrong. Wal Mart will always have everyday low prices.

Anonymous said...

warming rack for Charbroil 9000 series U-burner grills

Anonymous said...

how can oct #'s be out already? there's still halloween, big $ in that

Jip said...

To make things more interesting, Wal-Mart has been extending credit to customers via their own cards. Sooner of later, they gotta call in those markers...

Anonymous said...

"they ship tons and tons of crap from china to our shores, and then truck it all over the country in gas chugging big-rigs. "

Not really true for W-M. Most of their inventory goes directly from the ports to the stores, and most of it is sold long before they have to pay their suppliers. Their real-time tracking and inventory control is what gives them the advantage. If fuel prices jump, it will hurt their competition more because the other retailers typically have to warehouse and transfer goods more than W-M.

You can fault W-M for many things, but inefficiency is not one of them.

Anonymous said...

when the sales declines are mostly in women's clothing, it must be very bad

:>}

Anonymous said...

ChinaMart: NOT good for America.

I never shop at WalMart. Target is like an upscale department store by comparison, and the prices are nearly identical.

There's nothing particularly special about their inventory control system. Any competitor can hire a few good people with computer science and math degrees (whose jobs probably got outsourced to India, so they'll be willing to work cheap) to come up with a similar system. It's not general relativity.

foxwoodlief said...

I too never shop at Walmart, don't care if I saved 50% (oh, maybe they'll sell all those foreclosed homes?), Walmart is immoral. Competition is good but a monopoly? Evil empire!

I'd rather have less and pay more.