Because of Wal-Mart’s sheer volume and scope, economic analysts pay close attention to Wal-Mart sales revenues. Wal-Mart sales revenues are a leading indicator of consumer spending and also the overall health of the economy. Many sales reports coming from leading retailers are meeting expectations. Sales reports will show there is a lot more hiring, paying, and a lot more hours to work. Target's sales are up while Wal-Mart's sales are down. But officials that are from both companies are saying the consumer comeback many hope will drive the U.S. economic recovery from the Great Recession may not be really be sustainable.
Article Source: 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. Shoppers who spend fast cash loans give the store a lot more than $ 400 billion in annual sales. 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 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 exact same period a year ago, same-store sales rose 3.6 percent. During Wal-Mart's fourth quarter, a 1.6 percent decline in same-store sales started.
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 predicted 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 nevertheless 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.
Sales revenues at Target
Something about US economic recovery in 2010 is indicated by Wal-Mart vs. Target sales revenues. Target, an emerging rival to Wal-Mart’s demographic, reported a 29 percent increase in first-quarter net income. The Associated Press reports that Target’s sales revenues rising are actually a sign the retail chain is drawing customers from competitors such as 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 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.”.
U.S. economic recovery 2010
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. As the economy gets better, Wal-Mart is losing its customers that it had won during that huge downturn. Based on sales figures, many of those customers have taken a baby step up to Target.
Predictions for US economic recovery
Wal-Mart might just start having to pay if they want US economic recovery to be sustainable. As outlined by The CNNMoney.com article, retail sales expanded over the last seven months because 40 percent of current spending comes from 20 percent of the highest incomes. Plus, because of events like the stock market Flash Crash and European debt crisis, the rate of the retail sales increases fueled by the more affluent households has slowed since March.
Strange, long US recovery
A lot more work and money is going to be needed by Wal-Mart's customer base if they are 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.
U.S. economic recovery 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 within the Washington Independent, Pianalto said a heightened sense of caution is driven by deep uncertainty the standard of living Americans had become accustomed to, in the past, will return. People who began their working careers within the mid-1980s had experienced consistent prosperity broken by two very brief downturns. Expectations have shifted quite a bit due to this long and deep recession.
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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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