Wal-Mart Sales Revenue Clouds U.S. Economic Recovery Predictions

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 the health of the economy. Recent sales reports for some of the nation’s biggest retailers have met or exceeded expectations. An April jobs report shows a lot more hours, a lot more pay and more hiring. Right now, Target sales are up while on the other hand, Wal-Mart sales are down. But officials from both companies are saying that the consumer comeback many hope 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 By Personal Money Store

Wal-Mart sales report

Wal-Mart, the world’s largest retailer, averages more than 100 million shoppers each week. A lot more than $ 400 billion in annual sales are generated by shoppers with fast cash. CNNMoney.com reports the Wal-Mart sales report really shows revenues worldwide rose 6 percent to $ 99.1 billion, which beat analysts’ forecasts of $ 98.45 billion. However, sales at Wal-Mart stores that are open at least a year — a key metric of retail performance called same-store sales — fell 1.4 percent within the three months ending April 30. In the exact same period a year ago, same-store sales rose 3.6 percent. The first-quarter drop follows a 1.6 percent decline in same-store sales during Wal-Mart’s fourth quarter.

Wal-Mart sales revenues 2010

Wal-Mart has reported in the sales report logs the company's fourth quarter of dragging US sales. The Wall Street Journal reports that Wal-Mart forecasted its U.S. sales would continue to be sluggish this summer considering the working-class customers who form Wal-Mart’s base still reel from the effects of the recession on their personal finances. Rising gas prices and unemployment heading into the summer cloud the Wal-Mart customer's outlook even more.

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, as the Wal-Mart rival, reported a 29 percent increase within the first quarter of their income. The Associated Press reports that Target’s rising sales revenues are a huge sign the retail chain is drawing a ton of customers away from competitors such as Wal-Mart. However, during a conference call to investors, Target Chairman and CEO Gregg Steinhafel said “Clearly, the economy and consumer sentiment have improved given that the weakest point in 2009, but we believe that both are nevertheless somewhat unstable and fragile and will likely continue to experience occasional setbacks as the year progresses amid a stubbornly high jobless rate.”.

Economic recovery in the US 2010

Target, as a Wal-Mart type store, took a huge hit during the Great Recession. Wal-Mart’s sales and profits rose during the recession as cash-strapped Americans left supermarkets and department stores in search of bargains. Wal-Mart seems to be losing the customers it won during the downturn as the economy gets better. Numerous of those customers have apparently been taking baby steps to Target.

Predictions for US economic recovery

Wal-Mart’s U.S. demographic could have to pull out their wallets for the U.S economic recovery to be sustainable. The CNNMoney.com article makes a note that retail sales expanded over the last seven months because around 40 percent of current spending comes from 20 percent of the highest incomes. Also, because of events like the stock market Flash Crash and European debt crisis, the rate of the retail sales increases fueled by some households has slowed since March.

US recovery is strange and long

For Wal-Mart to shore up the sputtering economic recovery, they’ll need a lot more work and more money. The U.S. unemployment rate stuck at nearly 10 percent, the underemployment rate is increasing, wages decline for people who can find work and inflation-adjusted income is flat. It will take a lot more than three years to bring the unemployment rate below 6.3 percent, where it was at the peak of the 2001 recession at the current economic growth.

Economic recovery for US headwinds

Wal-Mart’s troubles, the retail sector’s outlook 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, within the past, will return. Those who began their careers within the mid-1980s have experienced mostly prosperity with the exception of two very brief downturns. Expectations have shifted quite a bit due to this long and deep recession.

Citations

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