« Priceline and Hotwire gain new discount competitor | Main | What will U.S. health care reform mean for Cdn. economy? »

March 24, 2021

Walmart's sales flop as the economy heals

When searching for barometers of the economy, analysts check the usual suspects: unemployment numbers; Consumer Price Indexes; the strength of the greenback.

But with so much data to consider, economists can never really know what the heck's going on. We’ve complicated things too much.

Maybe, then, we should no look further than one place to gauge the economy’s health: Walmart.

As you might remember, when things started to turn sour around 2008, everyone started rushing to the discount retailer when saving became in vogue. We were told financial Armageddon was coming, and we responded accordingly.

And Walmart’s sales boomed, of course. The chain posted rock-solid quarters (it raked in same-store sales gains in four of the first six downturn quarters, according to the New York Post) when many companies couldn’t turn a profit if this guy was sitting on the board of directors.

Now? See, this whole “figuring out the economy” thing ain’t so hard. The recession is down, and so is Walmart.

According to the Post, shoppers are “abandoning Walmart’s US stores in droves” in an act that’s shoving the retailer’s downturn success back in its face. 

The Arkansas-based chain is primed to post four straight quarters of same-store sales drops at a time when, conveniently, the S&P 500 Index has risen during each of those measurement points.

In fact, the relationship between Walmart and the economy goes back further than that. A study by the Post shows that, in all but two of the last 13 fiscal quarters, the outlet’s same-store sales dropped whenever the S&P gained – and vice versa.

Can Walmart rebound? Sure, of course. It’s Walmart. It just spent $1.17 billion on its “Save Money, Live Better” ad slogan in the last three months of 2009 alone. It’s a powerhouse.

But it won’t be easy. A recent Reuters survey showed that one in three store shoppers who purchased goods at Walmart when the economy stunk will now take their business elsewhere since its improvement.

What have your Walmart habits been like? If you shopped there during the recession, will you continue or do you swear by the store no matter what state the economy’s in?

By Jason Buckland, MSN Money

TrackBack

Comments

Post a comment

advertisement

Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...