"That, Wal-Mart executives said, is precisely what has begun to happen in its 4,000 United States stores over the last three months"

How does running out of money at the end of the month explain lower sales for the past 3 months?

He is probably noticing that sales are down in the last few days of every month. If your sales are down, you make less $$$.

Duh?
When gas and groceries keep going up every month on top of sky high medical costs, buying some optional cheap plastic crap or remodeling your house are pretty low on most people's priority list.

Hey, if my medical costs went down 40% (the national health insurance estimate) and I didn't have to pay huge out of pockets for prescriptions I would have all sorts of cash to throw around.

    Clothing sales are down, Mr. Walmart? Gosh. Maybe it's because you stopped carrying the "Where my Peeps at?" t-shirts my son loves. Maybe it's because you stopped carrying Wilson heavy-duty crew socks. Maybe it's because you're out of Brahma waterproof steel-toe boots. See, Academy Sports next door has that stuff, and they get the biz if you can't stock it! Idiots.

Maybe consumers are becoming smarter and know that shopping at Wal-Mart is a bad thing to do.

Why is everyone suprised by what is occuring? The increase to the Dow Jones was nuts to begin with because every single indicator for years has shown that consumer spending is hurting. Companies have been doing great profit wise but thats just because of the Bush admin's free ride. The profits never made it down to the middle and lower class whose seen expenses increase dramatically but income not match that increase.

So basically you have companies appearing to do buffo profits which brings the Dow Jones up, but then reality sets in because people are starting to remember that the engine of the economy is not company tax savings but how much disposable income people blow on things they don't really need. No disposable income, no buying, no buying, no increase in sales, no sales, no profits, no profits, no bonues for high level executives (in theory). And really its the bonuses that make the CEO world go round, not profits.

Also, maybe the customers are doing fine but are just choosing not to go there on Sunday and load up on crap they don't really need. It would be interesting to compare their grocery sales trends vs. home items.

@Fuzz: I think he meant "before the next paycheck comes in," in a more general way. Since paydays vary, it's probably a monthlong trend.

Gee, you would think Lee Scott could figure out that the reason people who shop at WalMart are running out of money is real, real simple!

The jobs that people who shop at WalMart have, have all been shipped to China!

If their jobs were still here, then they wouldn't be flipping burgers for a living, they'd be working in steel mills, appliance factories, TOY FACTORIES [which don't poison our children], and electronics factories!

Let's ponder a hypothetical question:

If you could go back in time, would you kill:

a.) Adolf Hitler
b.) Sam Walton

Agree with Kingdom 2000. The engine of the economny is consumer spending. Giving really rich people and cooporations big tax cuts doesn't contribute enough that engine as they can't make up for all the consumer spending by buying 2nd homes and yachts.

We've also been in a negative savings (i.e. people are buying stuff on credit) situation for a while. At a certain point, either the person pulls back or goes bankrupt- neither are good.

We can also thank Wal-Mart for driving down overall wages. For a while, it worked to their advantage because people could only afford their cheap crap, now they can't afford anything other than the basics.

@ BOHEMIAN

"When gas and groceries keep going up every month on top of sky high medical costs, buying some optional cheap plastic crap or remodeling your house are pretty low on most people's priority list."

Sadly, I have to disagree. One of the big reasons people have so little money is credit card debt, and I bet the majority of what they're charging isn't essential stuff like medical bills and groceries.

An admittedly narrow example: my parents and ALL of my friends currently carry credit card balances between $2,000 and $20,000. I see what they buy: electronics, unnecessary computer upgrades, luxury items, video games and consoles, redecorating materials, movies, dining out, etc. Some of them are now realizing that the party's over and they have to pick up the tab (and then some). They're hiding their debt from friends, family, employers out of embarrassment. They're starting to talk to debt consolidation services and considering bankruptcy.

In short, the reason useless crap is low on their priority list is because they've really painted themselves into a corner financially by keeping useless crap high on their priority list for so long, and now the bill is consuming all (or more) of their income.

After watching PBS Frontline's episode on credit cards ([www.pbs.org]) and reading numerous blog posts about debt management and reduction on Zen Habits, I'm convinced the problem is widespread and I don't just hang around with a bunch abnormally irresponsible people.

It's a tough selling environment? Yet Target, Costco, and J.C. Penney are up 5, 7, and 10.2 percent, respectively!

No, Wally, your stores suck, your PR sucks (right, Ben?), and your attitude towards your employees sucks. And the fact that your stores are the grand central stations for the Chinese poison trains doesn't help much either. Low prices at any cost, indeed.

I've never had a good experience in Walmart. The employees have bad attitudes, and the customer base is full of non-English speaking people and undisciplined crying babies. The only thing they have going for them is their refusal to sell out information to medical people.

It was Henry Ford who figured out that you can make more money by paying your employees enough to buy your products.

You heard the Consumerist, people.
Support the econmony. Give me money.

*wishes that tactic would actually work*

Wow. I love my Wal*Mart...I guess you folks just have the white zone ones. FOBs actually give a damn about their jobs, and are genuinely helpful at mine.

The running out of money argument seems a bit odd. Just last friday I picked up some workout shirts for $2 each. If people can't afford Wally prices then damn.

@crimsonwhat: The key word there is consumer. In a proper capitalist economy, consumers go for the best bang/buck. And that is WalMart.

Hahahaha! Maybe it's because most of the people work in jobs at Wal-Mart or the equivalent.

/Maybe if Wal-Mart actually bought some US made products, people would have more money to spend.

//Maybe if we had some Congress Members who had some spine, we would have protections for Labor like they have for Business. You can't undercut business with price supports, but you sure can undercut Labor with your low salaries.

I've been seeing this coming for years, and I'm depressed to have been right about it. I'd love to think this means that things will change--that jobs will come back here and people will gain some perspective on their possessions and aspirations--but somehow I doubt it.

The cost of everything has gone up a lot in the past few years.
Gasoline is up. Natural gas is up. Home heating oil is up. Electricity is up. Those crappy little fees attached to all of our bills are up. Groceries are way up.

$5 here on a bill and $10 there on a bill add up at the end of the month.

It doesn't take a genious to figure out that if all our bills are up then you need to cut somewhere. Lowering the thermostat, eating mac and cheese, not going out to eat or on long trips.

I am still in shock everytime I go to the grocery store and the bill is over $100. I used to regularly get all my food for about $60 a few years ago.

Our walmart here is not that bad. It seems to vary greatly depending on the time of day you shop and what type of item you are looking for. If you are looking for a brand name item that is the same throughout many retail stores walmart may be a good choice, just remember that walmart is self service so know what your buying before you buy it. I actually like walmart because they do not try to sell you extra crap when you are buying electronics plus they have a 90 day return policy on items that other stores do not have that much of a return policy on. If you are buying walmart branded crap then you will obviously be getting lesser quality and you should expect an experience more like what your reading here. I think the whole Chinese Poison train has really given walmart a bad rep among consumers though, especally with all the toy recalls, although Toys R Us and many other stores sold the same toys.

I don't know. I'm making more money than before, but it's been 2 years since I've set foot at Wal-Mart because of the reasons most of us agree on. Although the thing that finally convinced me to stop going there was "the final insult" where they check your receipt and your bag contents when they just saw you walk from the registers (I was the only person at the registers at that time!)

And I don't shop at Home Depot because of their lousy customer service when compared to Lowe's.

This is just one person, but I wouldn't surprised if a lot of others agree with me.

Geez, Mr Wal-Mart, you evicerate an entire layer of American retail, you force US manufacterers to outsource to China or get dropped and you blackmail localities to give you tax breaks instead of being able to invest in infrastructure.

Too bad you've been raping America for the last two decades: no more blood to squeeze out of that turnip!

(ahem) This is precisely what economists expected to happen over the long term. I'm shedding no tears that Wal-Mart is screwed by their own screwing-over. Hope their stock options are under water and remain so.

@trai_dep: Hmm..what's that old saying....You make your bed and then lay in it. I'd say the beds are all made, and Wal-Mart is getting ready to do some laying. Wal-Mart, you've shaped a large part of the retail landscape for the last decade or two, so take a good look in the mirror to find out who's made a mess of things.

They don't need more money, they just need more credit cards! ;-)

Well if the Fed keeps dumping more money into the market we'll have plenty of it. Of course, it'll be valuable only for use as t.p., but we'll have more money!

@basic0: My impression is that the idea that most Americans are irresponsible with their funds is at least somewhat overstretched.

I have (and actively use) multiple credit cards but haven't carried a balance in years (and when I did, it was self-employment taxes on a very low interest, non-time-limited promotional card with no hooks). Not one of the three bureaus has me as ever missing a single payment. My percentage-of-available-credit-used value is low. I own my own home (though the bank owns me in turn). I check my credit reports for inaccurate data regularly. I've been very, very careful about all of this for years. The only thing I'm dinged for much at all is that my recorded credit history goes back less than seven years -- by about six months.

My credit score is 65th percentile.

If being as anal as I am on this topic is 65th percentile, obviously a very big chunk of the American public is doing something right.

    The Walmart folk near me, in Alabama, seem to be pretty damned glad to have their jobs. I use the store, especially since it's right next to Sam's Club. The only "local" grocery store that has a decent balance between price and quality is the newcomer, Publix. They're nice, and there are a LOT of great things like Corn Flake Crumbs, that you can't get anywhere else! Still, I can't afford to shop there all the time.

    I know what Ben's talking about. I've had friends, who were drowning in debt, then suddenly buy a new plasma TV. "Hey, it's ok," they reassure me. "I got a new Platinum Visa!" It's a crazy world... Me, I'm still excited over my 1997 model Zenith 27-inch TV. Biggest TV in the family. Whooooo!

I don't see how this is happening. To me it seems that more and more people are giving in and dealing with the crap that is WalMart for their cheap prices; Mostly because they're either drowning in bad debt or freaking out because everyone they know is drowning in debt and they want to stay as far away from high spending as possible. WalMart's quality, on the other hand, is falling exponentialy. Last time I was there (reluctantly) I had to step over things and the terrible lighting gave me a headache. My goal was to have keys made and that didn't happen because the place was such a mess. It seriously grossed me out.

The problem is that all the manufacturing done by its suppliers moved from the U.S. to China to get a better price for Wal-Mart. But Wal-Mart can't stop there. They have to continually undercut the previous supplier which in-turn puts further cuts in the quality of the merchandise. In addition, the loss of manufacturing jobs has followed them to China, as Wal-Mart's business practice is causing companies to have to under Chinese manufacturers with other Chinese manufacturers. You have to love their purchasing power: sell to us, your #1 buyer, at a loss, or we'll stop buying from you. Either way, Wal-Mart doesn't give a sh¡t what happens as long as they can sell it for less. And with the passage of time, Wal-Mart reinforces the tried and true adage that "you get what you pay for". Quality products aren't cheap.

Am I the only one who took the paycheck statement as people waiting to get their monthly welfare check before going to shop at walmart? Hence they run out of money at the end of the month.

Actually, I think they are wrong... I went from a weekly walmart shopper to not stepping in there for months, not because I ran out of money, but because I finally started making enough money I could afford to go somewhere else. I have noticed this with many of my friends also.

Of course people run out of money. I came up with this theory in 1999 that most people of my generation will not have a disposable income because they insist on spending every dime in luxury services. And I was 100 percent correct. How much do you people spend to watch tv and play on the computer? I bet its about 100 bucks a month. How much are your cell phones? I bet they are also about 100 bucks a month. This isn't including all those dumb gadgets that you have that all have monthly fees like DVRs, Itunes, and I-phones. I bet if y'all ditched the luxury stuff, and cable tv, broadband and cell phones ARE luxuries, I bet you'd have almost 300 extra dollars a month.

I admit, Walmart is evil, but like all things evil they have a purpose. The Walmart in our area is full of "lower class" client's and I really do not like to shop there, but they have good prices. Just not on everything. Example, bag of Utz chips at Walmart, $2.99, same bag at local grocery store $3.69, they aren't chinese poison train chips or a lower quality, Walmart just chooses to charge less for them. Stay in the grocery side and you will be ok. Go into the General Merchandise side and your are on your own. Also, whats wrong with saving a little money, you can put that 70 cents toward your credit card debt.

I have absolutely no problem with walmart. Before our town got walmart, we were bled without mercy by the local stores. After they openned, prices became competitive, and service levels increased, thank-you walmart. And BTW if somebody doesnt like working there, then don't. Regarding this headline, people running out of money at the end of the month..DUH..when it costs 50-60 bucks to fill your car and it used to be 20, your gonna run out of money.

@Basico

I think were both right. Many people who have had their bad consumption of debt come back to bite them through credit card debt or bad home loans are pulling back too. Now combine the people who have amassed too much debt with the people who can't keep up with the rising costs of basics you have two large groups of people who have both pulled back on their spending.

@dwayne_dibbly: How is the american debt problem Wal-Mart's fault? If anything Wal-Mart has been keeping the problem at bay buy being a place that you could feed your family when you only have $3.53 left in your account (hex-nut is free).

In 2001 families were eating at posh bistros

In 2003 they said, hmmm, getting tight well start going to the grocery store more often and mixing in pizza from time to time

2004 costo, buy in bulk

2005 I thinks we dont have the funds to buy in bulk, off to target

2006 Honey we cant pay all our bills this month aaaaaaand eat, looks like we're doing dinner at wal-mart.

2007 ???

2008 Make Profit.

It would be interesting to directly compare sales increases & decreases with their main competitors.
Walmart vs. Target and Home Despot vs. Lowes.

Someone else mentioned Target is up. At least locally I have noticed more mid income people are favoring Target and Lowes. The main reasons being quality of products and how the stores are run.

Target isn't a hell hole and you get a better product for about the same money. Lowes has more selection and you can actually get someone to help you.

Maybe if all the stuff they sold wasn't Made in China, we would have jobs which paid the people HERE, and they would have money to buy stuff...

I've always wondered why visitors to this forum called Wal-Marts hellholes & filthy & such, as all of the locations I've visited around where I live (Jacksonville, FL) are just as nice & clean as a Target or any other bigbox store. Then I visited the Wal-mart near the Anne Arundel mall in Maryland & completely realised what you guys have been talking about. It was one of the most filthy, crowded, disorganized stores I've ever walked into.

@Ringofire:

I would pick c: Lee Scott. I don't think Sam Walton was that bad. After he died, Wal-Mart went into the shithole that it is still steaming in. I, for one, am happy that people are spending less at Wal-Mart. I've got my family spending less there. I've also got some friends to stop shopping there as well.

@djbrianflorence: But quality products also mean you don't have to keep coming in to replace them when they break...definitely NOT a wise business plan whenre WM is concerned.

@Mopar_Man:

Same here. I'm directly responsible for getting 56 people in my inner circle to stop shopping at Walmart. Yes, I'm keeping score :) .

Yeah, I have to concede that all of the Wal-Marts I've been in here in Texas are kept pretty clean and organized, except for the older ones in sketchy neighborhoods.

@Jaysyn: Some of the ones here in Pennsylvania are even worse!

@mopar_man:
There is a little bit correct of what you say.
It was Sam Walton that had WalMart buy American. I remember seeing their trucks with that all over the sides.
But he was dying at the time & probably saw his mistakes way too late.
Then Glass & now Scott run this monstrosity. They keep demanding lower & lower prices.
They forced Rubbermaid to move its production from Ohio to China or they wouldn't buy any Rubbermaid products anymore!
Because of WalMart, there isn't any middle level in anyone's product lines anymore.
Everything is either junk or luxury!

It doesn't say anything about running out of money at the beginning and middle of the month. I feel forgotten and it's freaking me out!

Adrienne
[adriennezurub.typepad.com]

Ever since the Target opened-up here, I have not set foot in a Walmart in months.

I hope Walmart dies a slow painful death. They created their own seeds of destruction. Now its all coming back to bite them in the ass.

I am not surprised at the large number of Walmart haters and just as unsurprised by the number of Walmart fanbois.

Two facts exist, Walmart uses unethical tactics with their own people, and with other businesses and government units, and Walmart is hurting the American economy. Outside of that, you can all have your debate, but those facts are not debatable.

I will not step foot inside of a Walmart, and I will vote against the welfare state such businesses create.