One of the Winners in Today’s Economy: Wal-Mart
by Efin Advisor | March 5, 2009
Not all is dark and gloomy in today’s economic environment.
Wal-Mart has announced that comparable sales at its US discount stores and Supercenters jumped 5 per cent in February, continuing its dominance of the faltering retail sector.
The world’s largest retailer also raised its annual dividend by 15 per cent to $1.09, as it continues to pile up cash at a time when many other leading US companies are cutting back on dividend payments to conserve liquidity.
The retailer said its February sales were supported by increased customer traffic, with continued strength in its grocery, health and entertainment businesses. It also said that it saw sales growth in home furnishings – a category where it had previously struggled.
Wal-Mart’s Sam’s Club discount warehouse stores reported a 5.9 per cent increase in comparable sales excluding fuel, outperforming the 4 per cent US sales increase reported by its rival Costco on Wednesday.
The luxury category in retail sales has fared far differently. Saks and Neiman Marcus, the luxury department stores, reported sharp year on ear declines of 26 per cent and 20.1 per cent respectively. Nordstrom department storess saw its comparable sales fall 15.6 per cent.
Target, Wal-Mart’s more upmarket rival, saw comparable sales fall 4.1 per cent. JC Penney, the department store, reported an 8.8 per cent decline, better than the mid-double digit fall it had forecast, and said it had seen good sales of its own brand women’s clothing and benefited from home furnishings sale.
Here’s the thing, it’s not hard to have higher revenues than everyone else when you bully your employees, deny them health care and any other benefits, refuse to let them unionize, and in general practice bad employment standards. These all save costs. It’s obvious that people are going to be going to cheaper stores right now, and when you are cheap and have less overhead because you dick over your employees, you make more money than everyone else
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Walmart is the future of American business, if its not already the present. No fancy decorations. No upscale decor. Just cheap products and everything you need all in one place. Its the ideal place to shop for everything. That’s why more people are buying from them: they just do good business.
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You know how Walmart beats out the competition: they put everyone else out of business. It’s become so bad that all retail in the US has become oligopical. How are people supposed to compete especially when Walmart is willing to work at a loss just to screw the little guy? Hell, I wouldn’t be surprised if they were at least partially responsible for our economic troubles. They’ve put so many people out of business that it makes it so less people are employed and the wealth is less shared than before.
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Ironic, i seem to remember reading that walmart was going to have to close many of its stores if obama was elected because of all the negative externalities of him being president. That certainly came true. Just goes to show you…
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I agree with Jacob. This sets a horrible precedent. It would be super cheap to run an airline that saved customers money by cutting out “frills and extras” like radar and maintenance, but there are reasons that things cost what they do. I think its wonderful that customers are able to get products cheaply, but eventually this vicious cycle will eat our economy alive. When we reward a corporation which denies its employees basic rights, more like it are sure to arise and force many workers into bad situations. Essentially, wal-mart is good in a pinch, but we must be very careful with how we treat them moving forward.
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I think that wal-mart’s policies are fine. If this is what it takes to stay open during a deep recession, I don’t think that it is appropriate to criticize thier practices. Maybe if the economy were doing better we could complain about workers’ rights, but a corporation’s first obligation is to its shareholders. I am certainly not in a place to scoff when it is one of the few companies still making money, and employing workers.
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I heard awhile back that Walmart was looking into opening retail banking outlets in their stores, too.
I wonder if they could do better than some of these banks that have made the wrong choices about mortgage loans and investments.
I think Walmart was one of the few larger companies to increase their share price last year, but i do understand the fact their efforts seem to out a lot of small businesses out of business when they open a store in or nearby smaller towns.
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