May 11, 2007

Maybe it really is different this time: Wal-Mart posts worst sales ever

Has the debt-up-to-their-eyeballs-no-savings-housing-ATM-is-closed US consumer (finally) rolled over?


Wal-Mart, the world's largest retailer, yesterday posted its worst monthly sales figures since its records began in 1980.

The company said same store sales fell 3.5% in April on the same month a year ago. Same store sales measure the performance of stores that have been open for at least 12 months.

But Wal-Mart was not the only US retailer turning in a poor performance in April, triggering fears that the US housing slump might be spilling over into consumer spending and that the economy might be taking a turn for the worse.

47 comments:

Anonymous said...

Not sure what to make of this, I'm hearing the same "bad weather" BS that TCDL has been saying as to why RE sales are down. The weather does not keep me from going out and buying what I want & need.

Anonymous said...

yea, but the weather keeps all the hispanics from building houses and making money. And since they do everything in cash, they have no money to buy. Thus, that is how weather affects wal mart.

the real bob

Dale said...

I read this and my heart sank. We really are in the final stages before the panic sets in. Sad, and scary.

anonymous wimp said...

The real harbinger of doom is the reported numbers for Whole Foods is below expectations.

When you have status-seeking women eschewing their weekly or daily fix of premium-priced organics and cathartics for premium prices and instead going to costco for their food staples, you know that there is stress on the system at all levels.

Lars said...

"Bad Weather" must mean the housing market. Or maybe the average Joe just can't afford to spend like it's 2004 anymore.

Anonymous said...

GREAT SITE KEITH.

I HAVE A QUESTION OF THE DAY FOR YOU...

WITH ALL OF THE STUPID PEOPLE INFESTING AMERICA TODAY, HOW COME CULTS ARE'NT FLOURISHING LIKE THEY DID BACK IN THE LATE SIXTIES AND THE '70S?

MY WIFE'S ANSWER..."CULTS DO'NT OFFER CREDIT CARDS OR EASY LOANS!!"

THIS CAME UP IN CONVERSATION AFTER WATCHING RERUNS OF THE PBS AND A&E SPECIALS ON "JONESTOWN" AND THE FRONTLINE/PBS SPECIAL ON THE WACO MASSACRE.

A FRIEND OF OURS OPINED THAT THE "CONSUMERISM" OF THE NINETIES AND 2000'S BECAME A "CULT" ITSELF.

PLEASE CONTRIBUTE TO THIS DISCUSSION.

cobra2411 said...

It was too chilly and rainy in April to go buy anything... Not that the consumer had any money too... :)

And the greedy sheeple said "Huh... Sounds good to me, lets buy more stocks before we're priced out of the market..."

I'm still waiting for the day that they wake up at 3am in a cold sweat and say "HOLLY S!#^!!! What have I been doing?!?!"

That day is coming...

Anonymous said...

Ever hear about people boycotting gas and stage a gas-out. What a bunch of idiots.

If anyone truly wanted to get the medias attention, we should stage a boycott of all spending on a weekend.

That would send shockwaves around the globe.

Anonymous said...

from george ure:

-Consumer "credit" is up at an annual rate of 9% sayeth the Fed.

-Retails sales suck, sayeth the retailers.

-"Where did the money put on credit cards go, then?" asks the People's Economist.

-"House payments or groceries?" respond a few readers.

Anonymous said...

it now costs 140.00 to fill the tank of a suburban. i see many in the wallmart demographic driving low mileage vehicles long distances to low paying jobs. the ones with good construction/manufacturing work are getting laidoff or hours reduced. many of these same people got suckered into the "ownership society" through high risk mortgage products.
i can't imagine why they would not be pissing their money away on unneeded junk at wallmart!

Anonymous said...

Still Waiting..........................................................Yup, still no crash, let me wait more..................................................................Yup, still no crash, let me wait more..................................................................Yup, still no crash, let me wait more....DOPES!

Anonymous said...

>> HOW COME CULTS ARE'NT FLOURISHING LIKE THEY DID BACK IN THE LATE SIXTIES AND THE '70S?.

I thought ALL religions were cults? Did someone lie to me?

Anonymous said...

The immigrant song:

"It's fun to stay in the U-U-S-of A!!

It's fun to stay in the U-U-S-of A!!

Young man, young man, there's no need to feel down

Young man, young man pick yourself up off the ground

It's fun to stay in the U-U-S-of A!!

It's fun to stay in the U-U-S-of A!!"

Mort said...

Boycott everything!

Anonymous said...

But in a true rope-a-dope the private equity bubble (much bigger than the housing bubble) continues to send stock prices higher. So everything must be ok.

It all comes home to roost when the private equity bubble goes kaput. Stock prices will fall, the corporate debt market will go to junk, mass layoffs will ensue, and personal bankruptcies will go through the roof. Overseas dollar holdings will be returned as U.S. companies get taken over and the carcass gets picked clean. The U.S., once the proud envy of the world, will become the joke of the world.

Anonymous said...

"When you have status-seeking women eschewing their weekly or daily fix of premium-priced organics and cathartics for premium prices and instead going to costco for their food staples, you know that there is stress on the system at all levels."

Dead On- but then the market goes up and all the fund managers are buying Home Depot and other housing related stocks. This is truly Bizarro world.

Mammoth said...

If you squint your eyes just right, the wrinkles on top of the dog's head looks like a map of China.

bickerer said...

Still Waiting..........................................................Yup, still no crash, let me wait more..................................................................Yup, still no crash, let me wait more..................................................................Yup, still no crash, let me wait more....DOPES!

Pretty funny. Remember 1998,1999?

Anonymous said...

18 month drought in Florida, furniture seller MODERNAGE closes after 40 years in biz.

Restoration Hardware reports really bad numbers Thurs.

"bad weather" - yeahhhhhhhhh....

Anonymous said...

The US is a very big country and there is always someplace somewhere where the weather is bad. I do not recall there being any major storms that kept the entire country penned up in their homes. So I'd say the historical natioanl data has to already factor in local/regional drops in demand due to bad weather. So any drop would have been offset and sales would have been at least flat. A historic drop cannot be due to weather alone and Wal mart was not alone, all major retailers sans the upper crust places like saks & nordstroms were down.

Jim Cramer said it was because summer merchandise was on the shelf. Well then everyone would have been buying the remnants of winter/fall merchandise then!!

They say only the rich continue to consume independent of the business cycle, I think that is what the data is signalling. Thus there is a downturn, the masses are pulling back, but the uber rich are still spending because they can!!

SO

subdivide&conquer said...

http://www.nytimes.com/2007/05/10/business/11drug-web.html?ex=1336449600&en=e52836bfa206ca9b&ei=5088&partner=rssnyt&emc=rss
Wall Street Journal
Wal-Mart Sales Decline is Worst in 28 Years

5/10/2007

for all the talk i hear on HP about how statistics showing anything positive about the housing market are skewed and that a number of underlying factors are not being considered, i was fairly disappointed that HP took this "bad" news about wal-mart straight off the shelf and didn't subject it to the same scrutiny.

the above linked WSJ article explains changes in reporting policies which probably skewed march/april 2007 retail numbers. granted, weather and other factors could have played a part.

don't get me wrong, i enjoy the sarcasm and pessimism of HP, but c'mon, lets be consistent.

burn baby burn said...

"When you have status-seeking women eschewing their weekly or daily fix of premium-priced organics and cathartics for premium prices and instead going to costco for their food staples, you know that there is stress on the system at all levels."

I could not have said it any better. It is going to hurt this time around. The market is up again today well I guess the band played on.

Anonymous said...

If Walmart makes money you nutjobs are unhappy because Walmart is evil and making evil profits. If Walmart loses money you nutjobs are unhappy because it means the economy is tanking.

Make up your minds.

keith said...

Oh, no, how wrong you are (last gutless anon)

If wal-mart's sales are tanking we're doing the victory dance

That couldn't be more clear.

Anonymous said...

ummmm... lemesee...

april... april... what
happens in april...

oh... now it all comes back... something about
the 15th... and maybe
the way the Alt-Min is
starting to bite... federal tax collection is at an all-time high...

duh...

Anonymous said...

WITH ALL OF THE STUPID PEOPLE INFESTING AMERICA TODAY, HOW COME CULTS ARE'NT FLOURISHING LIKE THEY DID BACK IN THE LATE SIXTIES AND THE '70S?
====
Many Americans are active members of the Church of the Self, whether they know it or not.

Luv-that-Bush said...

I work in retail here in the upper Midwest. Our sales have been going down now for six years. The sense of doom is so thick that you can cut it with a knife.

Anonymous said...

When you have status-seeking women eschewing their weekly or daily fix of premium-priced organics and cathartics for premium prices and instead going to costco for their food staples, you know that there is stress on the system at all levels.
+++
Yes, maybe you're right.

What will tell me we're really in trouble is when the local Starbucks are no longer filled with people waiting in line for 10 minutes, paying $4 for plastic cups full of mediocre coffee dressed up with sugar and dairy products in various forms. When that behavior tails off noticeably, it'll mean the consumer really is tapped out.

Dean said...

The real harbinger of doom is the reported numbers for Whole Foods is below expectations.

Yes, but that makes sense to me. The demand for overpriced food is highly elastic, since it's a luxury good that, when you need to tighten your belt, you realize that you don't need it that much, after all.

However, Wal-Mart specializes in cheap staples. I'd have thought they'd be recession proof, since the first place people start shopping when they're low on money is super-discount stores.

Unless, of course, Wal-Mart's business model is not providing staples at cheap prices but rather convincing people to buy more and more stuff they don't need simply by pointing out what a great deal it is ("OMG! 50 cents a roll for duct tape! I'll take 20!"). I suspect that Wal-Mart's need to expand probably drove them to pursue the second business model, and now that's all tapped out.

Anonymous said...

I heard it again this morning about walmart and the weather. I conclude at this point that we will only have a recession if the weather is bad. Nothing else seems to matter.

GT said...

but cnbc says that everything is fine since nordstrom and saks is doing well!
what planet are they on?!

Anonymous said...

Regarding Whole Foods, I know my family and friends go a lot less since a great weekly local/organic farmer's market started up in the neighborhood. There are now dozens of these all over town on various days of the week (usually weekends or weekday evenings). It's much more fun to buy food from the farmers who grow it locally, and you know what you're getting. Fresh local ripe produce obviously TASTES much better, too.

So that could be part of it.

I don't go to CostCo because I don't want Chinese industrial solvents in my food -- and especially in my kids' food. You're hardly saving money by eating mystery food from thousands of miles away -- you're risking your health.

As for cults, there are PLENTY of cults and even ones that offer credit and bankruptcy counseling. They're called "megachurches" like the one meth-addict repressed-homosexual Ted Haggard led in the housing-bust lands of Colorado.

And there are even some old fashioned Jonestown cults. Check out this genius nut who claims he's Jesus, promises everybody wealth and has built a multi-million-dollar empire from gullible people all over North and Latin America: http://tinyurl.com/3883gm (Time magazine article from this week) ... he's a former heroin addict and flashy Pacino/Scarface type who claims he's Jesus *and* the antichrist and is part of a thriving "Prosperity Gospel" kind of cargo cult. Weird times, and getting weirder...

Anonymous said...

"If Walmart makes money you nutjobs are unhappy because Walmart is evil and making evil profits. If Walmart loses money you nutjobs are unhappy because it means the economy is tanking.

"Make up your minds."

Who's unhappy about Wal-Mart losing money? Anyone here?

Anonymous said...

"i was fairly disappointed that HP took this "bad" news about wal-mart straight off the shelf and didn't subject it to the same scrutiny."

I understand the point, however, given that positive spin is consistently applied to make things appear better than they truly are, any hint of negativity carries much more weight.

Anonymous said...

I work in retail here in the upper Midwest. Our sales have been going down now for six years. The sense of doom is so thick that you can cut it with a knife.
____________________

Well, one article I read said that when you look at the REAL, unmanipulated statistics on inflation and GDP, our country's been in a recession since 2000 when the dot-com bubble burst, so this observation fits....

Anonymous said...

-Consumer "credit" is up at an annual rate of 9% sayeth the Fed.

-Retails sales suck, sayeth the retailers.

-"Where did the money put on credit cards go, then?" asks the People's Economist.

-"House payments or groceries?" respond a few readers.
______________

What's sad is that it's a lot more painful to declare bankruptcy when your credit cards are maxed out. It's better to do so BEFORE you get labeled a wastral by the Bankruptcy Court for overusing your credit cards and are stuck paying off your debts forever....

Anonymous said...

Does anyone else make the correlation of (historically) poor retail sales in April being attributed to paying income taxes on April 15 and property taxes on April 10 and funding retirement plans by April 15? That dollar can only stretch so far.... Hmmm, pay taxes or buy that widget....sorry widget, you'll have to wait till May.

Joe M. said...

The point about Wal-Mart is the fact they are so huge and deployed.
Thus, they are indicative of the whole country's spending habits as a whole.

The G-Men will probably want to manipulate their data before long.

Anonymous said...

Now that illegal immigrants are making the effort to appear legal by paying taxes, I guess the money they'd spend in Walmart (and other retail sectors) went to Uncle Sam instead, resulting in the worst retail sales ever for April. Perhaps paying taxes (income, property, funding retirement plans) is the real culprit for poor April showings.

Anonymous said...

The main point about Wal-Mart is that they are so big. They represent American's spending as a whole.

Anonymous said...

And Peak Oil is just getting started too. Wow. When you factor THAT in, say sometime in 2008, we're in for a world of hurt. We'll get a preview with $4 gas this summer. Throw in a Katrina-style hurricane maybe.. rising food prices due to drought... I'd say the dominoes are falling.

Anonymous said...

http://www.businessweek.com/ap/financialnews/D8P2D4JO1.htm

Looks like b/t oil & housing greed there just is no money left over for the rest of the economy. I've gotten four solititations from homebuilders to purcahse a new home, 2 from Ryan & 2 from KHov this week alone. I am staying in my apartment and renting until all this BS blows over and prices are normal again. I rent & I take mass transit & I make six figures. The money I save goes toward retirement, living well in the here and now and saving for a rainy day.

Anonymous said...

"oh... now it all comes back... something about
the 15th... and maybe
the way the Alt-Min is
starting to bite... federal tax collection is at an all-time high..."

For most people, the only thing April 15th is filing. People pay taxes throughout the year and either break even when it comes to file or anticipate a return.

Anonymous said...

"still no crash, let me wait more....DOPES! "

That's right! Home prices are increasing at a rate of 20% a year and will do so for the next 50 years. Isn't that what the latest figures show, numb nuts?

Anonymous said...

WITH ALL OF THE STUPID PEOPLE INFESTING AMERICA TODAY, HOW COME CULTS ARE'NT FLOURISHING LIKE THEY DID BACK IN THE LATE SIXTIES AND THE '70S?

PLEASE CONTRIBUTE TO THIS DISCUSSION.


you must be referring to cults such as Synanon.

They have flourished under the radar. Their methodologies are still used today along with the EST and Lifespring programs in "troubled teen" boarding schools.

You would never know it from their ads in the back of Sunset Magazine or from their internet sites...but I was in one of these schools in the 80's and they did some fucked up shit.

if you want to learn more about it...go to www.fornits.com

Anonymous said...

WAL-MART IS A CULT!!

Anonymous said...

Didn't you ever notice how cult-like the REIC became . They all chant the same cheerleading spin .The realtors would quote the NAR as if it was the truth coming from the almighty .
Yep ,the big property ladder cult . The true believers that real estate always going up .