No Store Was Spared The Holiday Bloodbath, Not Even Walmart
Walmart missed its same store sales estimates (considered the most important barometer for the health of a retail operation) for December — leaving analysts "shocked and disappointed."
From CNN Money:
"If even Wal-Mart is unable to have a significant sales increase considering its low prices, it means that the American shopper is truly tapped out," [one analyst] said.
Apparently it wasn't just the collapse of our economy that lead to the poor sales growth — the weather was awful as well.
"Due to the difficult economy and severe winter weather in some regions, the holiday season was more challenging for retailers than expected," Eduardo Castro-Wright, vice chairman of Wal-Mart Stores, said in a statement.
Wal-Mart said sales of its grocery, health and wellness, and electronics products were strong in the month. But that was offset by weakness in clothing and jewelry purchases.
The seller also blamed inclement weather for the closing of 40 stores in December ranging from a few hours to nine days.
I guess the recession has to get a little worse before you guys start buying clothes and jewelry at Walmart.
So, American Consumer, why didn't you listen to Wall Street and start shopping at Walmart?
From Wal-Mart to the mall, a tough holiday [CNN]
(Photo: frankieleon )
Attention, Walmart shoppers! This ad is for you! Woo hoo!
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Comments:
this might be old, but:
a nice visualisation of the rise of wal-mart... maybe it will start going in reverse.
Seriously... their clothes are beyond terrible at Walllyworld. Fall apart within a week after one washing? No thanks . I avoid their nasty meat section too, seen too much expired meat come through the registers.
And IF anyone had the money for jewelry in this economy, do you really expect them to buy it at wallyworld unless it's solely costume jewelry? It's not like they have nice jewelery there. 'Least, not around here anyway.
Basically I go to Walmart for chips, soda, frozen goods and the occasional "pharmacy" type product, and that's it. Everything else is not worth buying quality wise or is actually cheaper at a grocery store. (Price of canned goods comes to mind). Plus they often only stock certain brands of foods and not the brands you're looking for...
I can't speak for everyone, but I've been doing most of my jeans shopping at the Faded Glory boutique on 5th Avenue. I find the experience to be slightly better than going to a Walmart for them.
I can see what will be written in history books now: Before we could control the weather the world went thought the "Great Weather Depression".
@Yurei: Yeah, one of the biggest misconceptions about Walmart is that because they have a lot of square footage, they have a lot of variety. I buy some of our dry goods and household stuff there, but grocery stores 1/4th the size seem to have at least twice the selection.
The utter depression that emanates from the store... the ugly aisles and fixtures, the cold lighting, and the miserable looking customers and employees is not worth the few cents savings that Wal-Mart offers.
I think that *maybe*, just maybe with the economy how it is people are starting to trend away from buying cheap junk that dies or falls apart in a shockingly short timespan and towards spending just a bit more for something they will not have to replace for a good while. Actually saving money in the mid-long term by buying goods that will last a bit.
Yes, can you tell that this is today's moment of pointless optimism for me?
Wow, I didn't go to WM during Christmas, but went last weekend and it was PACKED FULL with probably more people than during Christmas. If this is a recession, it's disguised as profligate spending. I was astounded when I came out of WM -- I had gone a little early, and by the time I left the parking lot was full.
@Yurei:
Overall the clothes are getting better. You are right, they used to fall apart after one washing, but some is getting noticeably better. And a few are already pretty good. I've bought their compression shorts/shirts (same as UnderArmour, just ~1/4 the price) and they're very good. I've also bought a few pairs of shorts that were fine. A swimsuit lost metal buttons on the rear pocket after one wash, though. No doubt that somewhere like Target is better, but Wal-Mart is shooting for some of that business.
And I'm with you on the meat. I also won't buy produce there. But they're much cheaper than any other local grocery for many food items (e.g., Kashi Bars @ 2.94 vs. 4.77 @ Kroger). The staples like milk & bread seem to be the one place I've found they can run more, but I think that's because grocers tend to advertise those as loss leaders.
this drives me nuts. we're in the middle of one of the toughest economies in recent memory & the nation's largest retailer still posted a 1.7% same-store sales increase. i would call that a significant gain.
when are these wall street assholes going to get a grip on reality - you can't expect companies to constantly outperform the marketplace & constantly exceed their forecasts.
I was once taught in some economics course that during 'bad times' people buy better made (more expensive) items. True?
Using the term "holiday bloodbath" and WalMart in the same sentence kinda reminds me of that Black Friday trampling incident in Long Island..
I just love going to the Supercenter near me and comparing prices with my local supermarkets. On staples, frozen foods and the like - often cheaper, not by a whole lot. For fresh foods (produce, meats, poultry, seafood), it's often cheaper for me to go to my local Wegmans or P&C than to go there.
Walmart isn't magically cheaper than everyone else on everything, at least around here.
@mightydarv: EXACTLY! The American consumer is looking for high quality goods and things that last. They're also not buying a sh!t ton of random crap like we used to. We're still spending, just only the the stuff we really need. Walmart is chalked full of stuff that nobody needs or wants, so are a lot of retailers.
At this point American consumers have been bitten, just like we were with gasoline we're not going back to that for a while, companies just have to get used to it. Reporters should also learn that if Walmart's profits drop 1% it's not the end of the world... just like 30,000 peoples jobs unfortunately. Because hey if they don't turn a big enough profit to pay investors more that would be a real shame. God forbid investors only make the same amount they did last year.
@Ash78: This makes me realize that I'm wearing Wal-Mart Faded Glory jeans right now.
Ack. But comfy nevertheless! And they've held up well thus far.
@apronk: I mostly just love the name. Faded Glory. Sounds like it should be a Neil Young album or something.
Our stores here had so much Christmas crap left over from the holidays that it is not even selling at 90% off, and some of it is not even worth it at those prices. I was in Target a couple days ago and there was STILL 3-4 aisles filled with Christmas crap that was not moving even though it was 90% off. In previous years this would have been unheard of, as pretty much the entire Christmas department was cleared out on December 26th at 50% off, you were lucky to get anything at 75% off. People just aren't buying all the crap retailers throw at them these days.
I like Target: I identify with their edgy appeal.
@Trencher93: I do wonder though how much of that traffic is actually generating revenue for them though, and how much of it is the double-traffic-single-revenue effect of people buying gift cards for the holidays and then the second flood of people redeeming them post-holidays.
@acknight: No one retailer is going to be "magically" cheaper than everyone. Every weekend another circular goes out with a different loss leader attempting to lure you back in with lower prices on the products you frequently buy. On a fairly consistent basis, I see cheaper all-around pricing at Wal-Mart on the things that my family buys. If we really wanted to, we could now (in theory) split our shopping between Wal-Mart and another grocery store to save even more - but before I moved it made much more sense to do everything at Wally World.
We will likely still do most of our shopping at Wal-Mart simply because it is all in one trip and since our scripts are now at their pharmacy the circle is now complete.
Exactly! There comes a point when a company can no longer make 20% more profit than the previous year. I believe we've reached that point in history. It's time for corporations to tell their shareholders that making $50 million in profit instead of $60 million is going to have to be good enough for a while.
@Yurei: I pretty much use walmart for the same reasons, and if another store is out of the product I need or doesn't carry it. Walmart's selection is pretty limited here, so they usually don't have everything you need at once in their store. They are good for consumables like food and paper products, and believe it or not their food is very fresh since it is constantly moving off the shelves, at least here. Better than going to certain grocery stores here that are known for constantly carrying expired products. We also do not have a walmart with a meat department or extensive food selection, they pretty much just have the basics.
For clothes and furniture and things I am actually going to keep however I look elsewhere. I can pretty much find clothing on sale at any other store for walmart prices. Especially with shoes, I am not sure why anyone would pay 20$ for a pair of cheap, junky and uncomforatble shoes at walmart when you can get a brand name pair at a discount store like Marshalls for 20$ or less. Especially when Marshalls is down the street from walmart.
@mightydarv: This is definitely true to some extent and I can see it with the inventories of stores here. Walmart does carry more essentials than Target though, which is filled with frivolous crap that you don't need. People are scoffing at made in china goods and as you said they are avoiding random crap. Its taking much, much longer for the Christmas leftovers to sell than in previous years and the discounts are steeper. I wish retail would fill their stores with better stuff that we actually need instead of shoving each holiday in our face like its the end of the world if we don't load up a cart full of Christmas crap then the next day come back for another cart full of Valentines day crap.
Simply put, they probably make money off of it. Think about it:
- Buy stocks
- Predict great gains over holidays
- Stocks go up
- SELL!
- Horrifying news of "worse growth than we could have possibly anticipated, pants now brown" spreads (in more ways than one)
- Stocks tank for no reason other than Wall Street magic
- BUY!
- Stocks rise again when everybody realizes the problem was completely made up
- Repeat every time a report will come out
In short, this whole mess of bullshit is manufactured.
There are certain things I buy at Walmart, certain things I won't.
At Walmart I buy cleaning supplies, hygiene items, storage items, household stuff basically, and most food items, but not produce.
I go to Target for decorative items, stationery, etc. -- basically things that I want to be stylish. Their food prices are outrageous though.
I go to our local farmer's market or gourmet grocer for produce items.
The only reason I would shop at Wal-Mart these days is because they have Maruchan ramen. Every other place sells Top Ramen, which tastes like cardboard.
Everything else we get is usually at Costco. 18 burritos lasts for a good two weeks and is only $10, so...
@morganlh85: Maybe it's just local, but the food prices at the Target here are comparable or cheaper than Wal-Mart. At least the frozen food and stuff I get a lot of is. And it's usually easier to check out, and it doesn't feel like my soul has been sucked out after I leave.
I still do go to Wal-Mart sometimes, but Target and the store around the corner are my first choices.
The joke at our house is that Wal-Mart only carries the one or two leading brands of every item, based on their sales. That's why if you have any brand loyalty to an item, you're better off looking elsewhere.
After some of my friends told me what it's like to work for them, We rarely set foot in Wal-Mart unless we're truly desperate.
I'm a single father raising 4 kids, so Walmart is a no-brainer for me, but I still limit what I buy there.
Wal-mart
- all non-food household items
- name-brand electronics
- some kids clothes (the rest at Ross and other discounters)
Winco (big box grocery)
- most of my groceries (I buy specialty and fresh items from better but more expensive grocery stores)
I also frequent Target and don't do Costco or Sam's club.
I hate going to the local grocery store for quick items cuz I still spend a lot, but it's 1 mile away while Walmart and Winco are 5 miles away.
@acknight: Walmart isn't magically cheaper than everyone else on everything, at least around here.
They are in my town, at least for groceries. After shopping Walmart for groceries for a while, the Kroger near me had a deal on soft drinks but you had to buy $20 worth of groceries. Opened my eyes quite a bit to how much lower Walmart was (at least on the stuff I buy).
I apologize in advance for the long comment.
I USED to shop at Wal-Mart but now I am avoiding it at all costs. In recent months, I have noticed a trend of increased prices at the Wal-Marts in New Jersey as compared to prices in other retailers. Wal-Mart used to have the lowest prices on everything, but to me it seems that they are taking advantage of the poor economy and the notion that everyone will start shopping there and they are bumping certain items up in price.
For instance, I was going to buy Christmas lights at Wal-Mart until I saw similar lights were priced cheaper at the Rite Aid in my town. I also priced a game online against other retailers and Wal-Mart had the 2nd highest price (and this was just a Kid's board game). And last Christmas, I had purchased a pair of fake "ugg" style boots at a retailer for $20 (regular price, not on sale). This year, Wal-Mart was selling a pair of boots which were almost exactly the same at $23-$25 depending on which NJ Wal-Mart you went to. Sure, it's only $3-$5 more but still.
@esp13: Why no Costco? They have good prices and treat their employees well (I am not a member, but I don't require bulk food purchases)
@bustyyorneekaps: Wal-mart is sort of like investing in an S&P index fund.
It won't perform as well as choosing expertly from individual stocks, but if you want the no-brainer choice, it will outperform all other retailers over a long period of time. That's the whole idea behind EDLP (everyday low price) strategies at any retailer that does them. It takes the guesswork out in the long run.
Drugstores often list items VERY cheaply, but usually those are pure loss leaders.
Why didn't I shop at Wal-Mart? There isn't one near me. Thank the super-liberal pseudo-communists who run Montgomery County and Maryland. I did go to Target a fair bit, though.
@Hamtronix: That would be in keeping with the Samuel Vimes 'Boots' Theory Of Socio-Economic Injustice.
What's absurd about all this is that their sales actually INCREASED over the previous year - they just didn't 'meet expectations.'
Bullshit. They still had a great year and you still couldn't find a parking space during the holidays.
@mac-phisto: Is the 1.7% same-store figure inflation-adjusted? If a nominal figure, it'd be a real drop. (Unsure, so throwing this out there to better intellectually-equipped readers out there)
It looks like Wal-Mart's innovative use of human sacrifice to goose Black Friday sales was a bust...
@Ash78: I don't think I've ever noticed items being priced lower at a drugstore, let alone a Rite Aid, compared to Wal-Mart pricing, tho. Mayhaps I just haven't been paying attention.
@Ash78:
Oh yeah. They recently turned the Walmart nearest me into a "Supercenter"; they made a whole new building and everything. But it seems to have the same amount of stuff it had when it was just a plain little bitty Walmart.
If I want to go to a real Supercenter, I have to go all the way across town.
They are building a grocery section right now, though. It won't be done until spring sometime.
@Trai_Dep:
Nice post.
Seems when you put everyone out of business, they can't afford your shit!
Bad business model.
@Trai_Dep: I once got OCD and made a spreadsheet of the main items we buy, then went around and priced them out in several stores.
The result is that Wal-Mart was generally about 2% cheaper for the things I buy. Not worth the hassle for me, but it might be for others.
@Yurei:
I'll cop to occasionally buying tops (sweaters, tees, tanks) from their White Stag women's clothing line... they are decently made and have held up well through many washings. Bestform bras, Curvation bras (Queen Latifah's brand) -- both are good at Wally World. Jeans -- I think they still carry Gloria Vanderbilt stretchy jeans which fit me well and last for ages. So, while you definitely aren't going to get high-end clothing at Wal-Mart, for casual stuff there are some decent deals there.
@Sam Wille: In Central New York at least, they typically aren't the lowest priced on most fresh foods.
Of course, they don't typically bother advertising around here either. Most of the grocery stores around here are comparable (+/- 50 cents) to most of their grocery items, and in meats/poultry, area stores are cheaper than Walmart.
walmart - FTL