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Wal-Mart Situation "Getting Worse" New Leaks Reveal
Two weeks ago, Wal-Mart stunned the world when a leaked memo discloses that February sales had been a "total disaster" and the company was facing the worst February start since 2006. Today, Bloomberg's deep throat in Bentonville strikes again, as a new leak emerges. "Wal-Mart Stores Inc (WMT), already struggling to woo shoppers constrained by higher taxes, is “"getting worse" at keeping shelves stocked, the retailer’s U.S. chief told executives, according to minutes of an officers’ meeting obtained by Bloomberg News. "We run out quickly and the new stuff doesn’t come in," U.S. Chief Executive Officer Bill Simon said, according to the minutes of the Feb. 1 meeting. Simon called “self-inflicted wounds” Wal-Mart’s “biggest risk” and said an executive vice president had been appointed to fix the restocking problem, according to the minutes."
So even as the market completely ignored the Wal-Mart revenue issue, which is "getting worse", the bigger problem is that now it appears to be affecting the company's supply-chain, which likely means that all of WMT's upstream vendors are suffering from the same malaise that has gripped all those entities that still rely on such historical trivia as profitability and cash flow:
Wal-Mart’s inability to keep its shelves stocked coincides with slowing sales growth. Same-store sales in the U.S. for the 13 weeks ending April 26 will be little changed, Simon said in the company’s Feb. 21 earnings call. Comparable sales increased 1 percent in the fourth quarter, compared with an average of 1.4 percent from analysts surveyed by Bloomberg. This year the shares gained 4.2 percent through yesterday, compared with a 5 percent advance for the Standard & Poor’s 500 Index.
Evelin Cruz, a department manager at the Wal-Mart Supercenter in Pico Rivera, California, said Simon’s comments from the officers’ meeting were “dead on.”
“There are gaps where merchandise is missing,” Cruz said in a telephone interview. “We are not talking about a couple of empty shelves. This is throughout the store in every store. Some places look like they’re going out of business.”
Cruz, 41, who has worked at Wal-Mart for nine years and oversees the photo and wireless sections at her store, said it can take weeks or months for merchandise to be replaced after it sells out.
“My camera bar hasn’t had cameras since early January,” she said. “They let the merchandise phase out but nothing new comes in to replace them. We’re supposed to have 72 cameras but we maybe have 12. What are customers supposed to buy?”
Sure enough, WMT again has pre-canned (pardon the pun) excuses for what this second leak is supposed to mean:
“There’s a number of misinterpretations and half- thoughts” in the documents, which were not official company minutes, David Tovar, a Wal-Mart spokesman said in a telephone interview.
When Simon said things were “getting worse” he was referring to “modular changes,” the process of replenishing merchandise to keep up with customer demand and changing seasons, Tovar said. Wal-Mart is working to “manage this in the most efficient way possible,” he said.
“We’re very pleased with our in-stock position,” he said, adding that products audited by the company and its consultants match or exceed historical levels. He declined to disclose what those levels are.
Tovar declined to make Simon available for comment
Naturally, following WMT's earnings, which showed that in the fourth quarter all was well, the market promptly forgot the recent "totally disastrous", completely oblivious that February is in the current quarter, and the management is obviously stonewalling the reality facing the retailer.
Yet if indeed there is a major issue affecting the world's most efficient logistical chain, what can other retailers say? And what are the implications for all other global trade routes, both macro and micro? Because if trade, which has been a casualty of central planning for years, is buckling, then is the scenario so vividly described in ""Trade-Off": A Study In Global Systemic Collapse" finally starting to come true?
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??? I still don't get this. Target is packed with stuff. They probably "ain't" selling a lot of it. The TGT youngmen/men's department for clothing looks fully stock. I can afford stuff but I do not think I have bought any new clothing in 9 months. I am not spending any money.
WMT for better or worse became so successful because of distribution and computers. When KMart was still using manual cash registers and punch ticket price tags - WMT had really good invetory control, computers and a distribution system. ??? So why the "restocking" problem.
I remember years ago in accouning books with LIFO/FIFO and probably economics books (pre-Krugman) that during inflationary periods - companies were wary to carry a lot of inventory because the inventory loses value quickly during rampant inflation??? So the stores would hold off adding a lot of inventory. Is this WMT's problem? Pre-hyperinflation? Strong yuan? Not getting paid for SNAP/EBT purchases?
Something does not add up?
I would imagine during an inflationary period a retailer would want to purchase more product before the costs increased, if inflation continued after they had purchased the product they can always increase prices and have even better margins as the cost to acquire the goods was even lower.
Yes. Correct. Faulty memory and logic on my part. Thanks. It was the need to use LIFO (last in first out) over FIFO (first in first out) accounting. The last in would be the highest cost.
I don't get it. I think their costs must be up big time. Energy and maybe the yuan. The cheap Chinese crap may not be so cheap anymore. I think WMT would be really hurting if they did not have EBT/SNAP cards for food stamps.
USually cheap retailers and high end retailers (tiffany Sacks Nordstrom) hold up in recessions. We are in a Oba Depression so it must be biting WMT. They must be thinning invventory a lot. Maybe their investory algos cutting back on orders and carry fewer prodcut options.
You forgot about the 'neutralizing the radioactive wastelands of Northen Japan' part.
It's interesting to know about peak oil and be able to predict these sorts of things happening while the rest of the world buries their collective heads in the ground and is SHOCKED every time logistical infrastructure starts failing or oil intensive industries start becoming unprofitable.
Next thing we will see is trucks constantly breaking down on the side of the road because 100% of a shipping company's revenue will be going to fuelling their fleets.
Bergan [Kuwait] Oil Field--1+ million barrels per day production.
DaQuing [China]--1 Million bpd
Cantarell [Mexico]--1 Million bpd
Ghawar [SaudiAr.]--3+Million bpd
Who worries about Peak Oil Prodiction?
Only those who know the first 3, above, are mature fields that have been on downward production slope for years.
That giant Ghawar is also very old and last 8 years struggles to maintain production with enormous costs to force more oil via waterflood and other tech that risks very steep rate of decline when these stopgap measures reach exhaustion, which is inevitable, but could be 1 to 10 years yet.
That there are zero-nada-none other Million bpd fields discovered, put into production and still producing in the last 30 years, more or less. Maybe Nigeria, recently? My data is pretty stale.
Oh yeah! Lots and lots of 50,000 bpd fields. I have read "the math" done by others and am convinced there will always be oil for the priviliged and dribbles for the rest of us. Within 1 generation.
Here's insider[sort of] Dick Cheney's 1999 math, for a starter: [search if link fails]
http://www.resilience.org/stories/2004-06-08/full-text-dick-cheneys-speech-institute-petroleum-autumn-lunch-1999
Resource wars by the resource insiders. Almost makes perfect sense.
I thought the last round was some kind of EBT card issue since the report came out in the first few days of the month, but then I thought....where the fuck else are they going to go? EBT carders feel too "embarassed" going to grocery stores now where they likely have to see a local folks from the neighborhood working there, so Wally-World it is even if there are absolutely zero healthy options.
First, JP Morgan announces 17,000 job cuts ( a result of Dickshit's ZIRP); then Wal-Mart, whose sales are fueled by JP Morgan EBT SNAP cards, leaks this information. What the fuck? Dickshit just testified in front of Congress this week that QE-4eva was fueling a new prosperity boom.
It's another "stick-up".
Raise the minimum wage or the Walmart gets it!
I know the formula that all big box companies use. Inflation has now hit these organizations under Bernanke QE programs. Thru corporate geographic store expansion, the unsecured loan obligations override inflow sales revenues. NINJA banking loan part 2 via new commercial loan expansion to masturbate GDP growth has stalled.
... or are they making far more money front running their own stock price movements, like Mike Dell did for so long, hmmmm?
I don't do a lot of shopping at Walmart because I just can't stomach the people, but I do shop at Meijer. It's a little pricier, but their produce is better. I have noticed lately that they have been suffering from the same malaise that Walmart is. I went last night and again tonight, both nights there was barely a car in the parking lot. A sight that I am not accustomed to.
Meijer is solid. If your ever in Grand Rapids, check out the Frederik Meijer museum, it's actually awesome! http://www.meijergardens.org/
It used to cost $1.50 to manufacture the $10 retail product the vendor sold to Walmart for $3.00.
Thanks to Bernanke it now costs $2.25 to manufacture the $10 retail product Walmart wants to pay $2 for. No way a vendor can sell for less than it cost them to make. Real business ain't Amazon.
Walmart's overhead, diesel fuel, electricity, health insurance, etc have all gone up. Around 55% of Walmart's margin goes to overhead. As overhead increases they push for greater margins. People can't afford higher retail prices, so we've reached the endgame.
Products can't be made cheaper, vendors can't make a profit, people can't pay more. The entire supply cain has ground to a halt. Way to go Ben.
You know why that $20 can opener breaks after the third can? Walmart bought it for $4, the vendor paid $3 for it from a trading company. The trading company paid $2 to some Chinese factory which had to make a profit. Your $20 can opener was probably made for less than $1. It's got to have the best quality parts, right?
What should be $5 is $20 because it takes $12 to pay for the business of running Walmart.
Why do you hate our troops? I mean America? er I mean why do you hate capitalism? They're the job creators.....
Perfect! Thank you for taking my mind off of Orly for a second.
You're a Hero
Sincerely,
Decider
C'mon it's not that bad...
They could cut the price and make a lower profit similar to the manufacturer.
Their share price would probably drop, but what can we do...
You describe one part of the equation. I think Walmart is getting a triple whammy.
1) As adr suggests. Walmart isn't able to squeeze their suppliers anymore. So guess what suppliers stop filling orders.
I suggest two other factors going on.
2) The crowd Walmart serves isn't the most discriminating or caring about how Walmart conducts business and are probably being hit the hardest being near the bottom. I've avoided Wal-Mart simply because of the way they do business. Hence there are a lot of people who purposely avoid Walmart, while the others that frequent it may not have the cash... (or (3))
3) Many people who do shop at Walmart may also be SHTF preppers. I was thinking lately since everyone and their brother is buying ammo and guns, they probably have been stocking up on necessities. Hence what this means is that buying will be spotty as people start using up stored SHTF inventory while watching for super deals before loading up the boat again. I have been doing this with Gasoline for almost 5 years now and am starting to do it with other things as possible. This uneven order flow is now hammering margins as well as supply flow management even in what should be the jewel of order flow companies - Walmart! This really could be signalling some serious problems to come.
Put simply the sheeple are getting smarter and financially hammered and hence their buying/spending habits are significantly changing. I know I'm doing it more and more. Doing large trips when things are on sale and not buying anything when they arn't and living off some of my reserves while I wait..
As a FYI I noticed one of my favorite stores Meijers having Buy 10 for $10 get 11th free (i.e. 91cents) on all kinds of things at once. AS IF they too are trying to lure in buyers. Well hell I obliged by picking up a few hundred pounds of canned goods (6-12 month supplies of some things 30-40-50% off) and feeling like I got a great deal with gas at $4 instead of $3.
I asked the stocking fellow this evening what was up. he said they were trying to move some inventory. They had a lot of damaged cans for some reason and the really smashed ones were even cheaper (which I wasn't interested in much). So I happly took my cart after cleaning them out of about 4 or 5 specific kinds of canned goods picking the undamaged cans of course. If prices go crazy or shelves empty my family will be fine for at least 1/2 a year while I wait to reload and add to the increasingly diversified and growing reserves.
Feast or famine buying. This may be the new normal and it may be playing havoc with supply chain management.
ZH people take a look and report back what your seeing when you shop, small mostly empty carts or people looking to be loading up. So far I don't see too many people loading up - mostly very small empty carts most of the time indicating people just arn't buying. I'm one of the few now doing major cartloads.
I do still see a fair amount of cars during the normal busy times at Kroger/Meijers. Walmart is too far off the road to get a good view of their parking lot. Other specialty stores in the malls - quite barren. But I've already (past 2 years) been seeing a lot of shop owners folding up and clearing out due to lack of business so this part isn't that new.
Report:
Here in the SE, I noticed about a year ago that shelves were holding less stock.
The problem has not gotten any better. Some brands are always out, it seems.
We also had a sleazy gun dealer buy up all the WallyWorld ammo, take it to his store, and mark it up. Except for his pricing, he is the WallyWorld of the area. Now you can only buy 2 boxes of 556/223 or 1 or 2 boxes of 22s. Forget the bricks.
Agree.
I suspect that the supply contracts have been changed (pay when sold) as well.
The suppliers will have terrible cashflow problems and can't supply cos their banks won't extend their overdrafts.
You see it everwhere now especially construction; no-one can carry any stock, their accountants won't let them.
True story. I purchased a can opener at Walmart for around $6 - 8. It was one of those side cutters and had big grips etc. Either they changed the cans or the opener went bad after about a year. Was in Walmart and went to get a replacement. Lo and behold, the old school can opener with the flat handle and a bottle opener on the end, with the metal rod with a little ball on the end, was there, the only update was the turning part had a black plastic tool coating as did the handles. Less than one dollar.
Took it home, and it performs flawlessly. The fancy can opener is going to the landfill.
Please, let this be the beginning of the end for this bad monster.
Do I smell a "Going Out of Business Sale", like the ones the cheesy mattress and furniture stores have?
After WMT tells market of stock buyback program, how will they lure EBT clients back into store? The entitlement cards only hold X monies. When prices rise, how will you retain your customer base? Heeheee. Just ask Nancy Pelosi for a solution.
Maybe the people in DC and NY will finally feel a little pain that the rest of America has been feeling when the sequester kicks in.
I've noticed the empty shelves too. I just thought they went to stocking shelves every other day. The one item in particular I've been going for has been sold out 3 out of 4 trips.
Car parking lots are noticeably thinner in February than they were in January.
And restaurants are hurting too, at least they are in Atlanta. Atlanta isn't exactly K-Street.
Obamas got the Madness
"Bob Woodward was killed early today by a runaway limo in Washington, DC."
Anyone who checks things like the Baltic Dry Index could've seen this coming a year ago. It's been bumping along all-time lows since 2008, with occasional rallies that fizzle out. Don't these companies have anyone reading the tea leaves?
Thanks to ZH stories on the Baltic Index, we were all aware of this.
I had a 3-mo supply of food until some racoons ate all of it.
so the wal mart model is working. they have successfully cannibalized the economy to the point where they can't make any money. the only solution is to up the limit on the ebt cards and give .gov cash bonuses to everyone making less than 15 dollars/hr. warm up the helicopters. here comes the cash drop.
happy days are here again 1930 http://www.youtube.com/watch?v=gqsT4xnKZPg
Worst sales in 6 years and they can't keep shelves stocked?
Sounds like some distribution managers need to get fired.
A lot of vendors don't like doing business with Wal Mart. If WMT starts having cash problems those vendors aren't going to want to float WMT for long. Things could get real messy real quick.
Live by the sword die by the sword I guess.
WMT Purchasing Agent: "Yeah, hey Sue I want to order another 15 truck loads of rubbers for delivery this Friday. We're willing to pay you 20% less than last time."
Sue, the Seller Agent: "Yeah, well Sam I'd like to get paid for the past 30 truckloads of rubbers we delivered to you in the past 3 months before we send out another shipment. And at 80% of the prior price I can afford to send you the empty boxes, and all the rubbers in a sea container, and your executive team can put them in the boxes."
WMT Purchasing Agent" "Hey, hey! That's not my department! Don't you want to sell stuff to us? How can you exist without us buying your stuff below your costs?!?"
.....dial tone......
http://www.nakedcapitalism.com/2012/10/walmart-the-most-powerful-company...
And, like The Far Side's cigarette smoking dinosaurs, were successful straight into extinction. IE - you can become so "successful" in an environment that is relatively stable that when wrenching change in the environment occurs it wipes you off the face of the earth.
That's an interesting point. It almost seems as if a large complex corporation develops a cancer and becomes unable to function. You know when you have paid executives making pointless statements like "we have to be laser focused" that they have run out of ideas and you are screwed. Nobody needs to be laser focused everybody needs to be competent and diligent and working from the same plan.
But nothing is wrong with the real world as long as Ben is in charge, and Wall Street relies on beating "expectations" "estimates" and "surveys" they fabricate!
Hey Wally....how about helping me get the IRS to accept my Tax Return that's been "waiting to be accepted" since Feb 2nd. I promise to come buy something if you can help me out here. I'm sure even Krugman would agree that my refund money will be stimulative....but someone at the IRS thinks they know something we dont.
De TurboTax ain't turbo'd no more. Perhaps you should seek counsel from Timmy.
Years ago a man said what is good for General Motors is good for the nation and of course was chastised for years, but he what said was true. When business can not sell product the economy is tanking and there will be unemployment across the country. What is good for Walmart is good for the country, you may be right that they have internal problems, but if the problem is external it is a sign of big trouble. I do not own or love the company but neither do i wish them to fail. If they are in trouble, other weaker companies are in danger of sudden failure. I say sudden because the owners or management have no choice but to bet everything on the next quarter.
The man who said "what's good for GM is good for america, was the president/CEO of gm, so his comments were a tad self serving rather than in any way poignant or thoughtful or even meaningful.
Learn the difference between information and propaganda or be doomed forever to live in TVLand.
Yes, well...and here is the difference.
Wikipedia explains:
At one point GM had become the largest corporation registered in the United States, in terms of its revenues as a percent of GDP. In 1953, Charles Erwin Wilson, then GM president, was named by Eisenhower as Secretary of Defense. When he was asked during the hearings before the Senate Armed Services Committee if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation "because for years I thought what was good for the country was good for General Motors and vice versa". Later this statement was often misquoted, suggesting that Wilson had said simply, "What's good for General Motors is good for the country."
At the time, GM was one of the largest employers in the world – only Soviet state industries employed more people. In 1955, General Motors became the first American corporation to pay taxes of over $1 billion.
So, you see, it wasn't exactly all that self-serving unless you mean as self-serving his concern for the country.
I think Wal-Mart should heed Simon Black's advice and move to Chile.
they are lightening up on inventory because they know things will continue to tank for consumers.
Its the freight. Shipping will only sail when its holds are full.
Bulldoze that toxic shit 100 feet under. Nobody needs that junk.
The real economy is not important, only the stock market is.
Greenspam
Walmart has a history of squeezing volume vendors to get lower prices for customers and acceptable profits for themselves. Normally an ok business model. Now though, QE fiat flooding is squeezing many commodities and foreign costs. In short, Walmart vendors are squeezed by rising costs, risks, and uncertainty in the US and world.
OK so we have no one buying but the shelves are empty, maybe that's why no one is buying. You know this retail thing isn't that difficult.
Actually, retail is difficult because the profit made on each item is so small, and unless a store does a high volume and continually moves merchandise, the store is losing money.
Any prepers in socal? This site has got me noid as a MFer.
You're only human, maskone909.
(pssssst ... btw ..... if you're that noid, get the hell out of SoCal).
Fuck you people, I love Walmart.
The groceries are not made in China and neither was the ammo. I like their donuts in the bakery - a dozen assorted for $4.
The Walmarts around here have Augason Farms food storage stuff for less than half of what Mountain House type stuff costs. They have 4 gallon buckets of rice with 30 year shelf-life for $22. 4 gallons of oats and wheat for about $13 each. I've bought hundreds of pounds of these all at my local Walmart. Not to mention cheap #10 cans of everything from powdered butter, milk, cheese, eggs, fruit, and even entrees.
Most of their shit is GMO dipshit. Soon your nose will fall off.
Billions of people have been eating GMO food for decades, dipshit. There should be a large segment of the world's population suffering from whatever GMO food causes if it were so bad.
Instead we see people all over the world living longer and healthier.
I've been eating "GMO shit" for 39 years and I'm in great shape and have zero health probems. I haven't even been to a doctor my whole adult life except for employment-related exams and checkups.
Thanks TW! I'm opening an on-line store that sells only GMO, Frank-N-Foodz. All of our stuff is GM, Radiated, Monsan-Toe'd. We feature Dick Cheney Horse Burgers this week. We have a section you'd love; Novelty Foodz. These are entirely made of chemicals and we can only sell them if we call them "novelties". We've introduced actual Weenie-Tots inspired by Married With Children. Tater tot wrapping a "weiner" dipped in imitation cheeze-puff. These are perfect for the prepper as they are completely immune to chemical breakdown: no known bacterium can eat them. They also effect the mind, the perception of time is altered. Perfect for those long nights in the bunker! The missus will love them 'cuz you can sand your finger nails with 'em too!!!
Whatever tickles your fancy, cupcake.
BTW, how come every one that I know who eats only organic and non-GMO food all look like they're dying of AIDS? I mean they make gay Obama look like he's an Olympic wrestling gold medalist.
I actually up arrowed both you guys. (Can I do that?)
Yes, it is a flaw in the system that Tyler will correct in the next update to make ZH more bloated.
BTW, why did the math question go?
One could say you are WalMart certified 'Round-Up Ready'......... and proud of it.
Oh, and you can go to Hipster-Mart and buy all your GMO-free triple gay latte berries for $50 and organic spinach for $10/lbs, and I'll go to Walmart and buy another dozen 30-year shelf-life buckets of "GMO shit" and we'll see who lives longer when the shelves are empty for good.
I have never seen a Wal-Mart selling in bulk as you discribe.
The ones in Washington and Oregon have them. Its also on their website.
"Trade-Off": A Study In Global Systemic Collapse" is an interesting article. "Supply chain failure" was the beginning of Kmart's demise. Wal-Mart's situation is even worse than what Kmart was initially facing.
I'd also like to mention that now more than ever would be an ideal time for Americans to pull together and form retail co-ops, which could take a good portion of Wal-Mart's business.
Those commie "co-ops" are great for everything. Example: I have a for profit electric company. Nearby there is a "co-op" electric company, not for profit. They pay twice as much for the juice as I do.
I'll stick with "for profit" thank you. I can always walk away from that. Once the "do-gooders" get ahold of management, prices double.
That's what happens when your customer base is a bunch of welfare bro obanoids and white trash wannabees demanding free shit. They don't pay for anything their whole shitting existence is free.
Think the Chinese, Japanese or anybody else are going to keep catering to this culture of crackhead
homey cretins forever? Brand Obama is absolute horseshit. Or a horsemeat that is.
I'd venture to say that there are quite a few ZH readers who frequent Walmart. And I'd like to think that all of us have jobs, and some of us are even self-employed. And some of us have a pretty decent net worth.
I get a kick out of people who bash WMT and WMT shoppers. Don't you fools realize that in most instances we are buying the same items? My shopping cart and yours are likely filled with many of the same things. WTH difference does it make where you are buying it from?
You're just paying more for your shopping cart, genius.
Oh, I know, it "makes you a better human being" if you are buying your items from Target or Kroger, wherever. Give me a freaking break.
But America is recovering...
but, but, the TV set say it's all OK.
Freddie! What's the word?
Gaps on the shelves at Costco, now that would be something.
Anarchy
I wonder if this means they'll be shutting down China's private airport in Arkansas... the one opened under Clinton that they use for bypassing border control and ferrying spies and contraband back and forth.
I never shop at Wal-Mart. Amazon is just way too convenient for me to blow a couple hours of my weekend on toiletries. But here's the ballz about WMT stores: most towns and cities build roads and put up traffic signs and lights to accommodate the big box retail store. Say these things do start to close: who's going to reuse that building? Probably no one needs that kind of space. Maybe if you made it into a bazaar and let several different sellers and vendors in, but you never see that kind of spontaneity out of American businesses anymore. [Which is not a bad idea for Wal-Mart to redeploy some these stores into local bazaars using their payment clearing system.]
So you'd have a lot of roads to empty buildings. And those roads were paid for with local tax money, not some highway fund at the federal or state level. All those materials and drainage and electricity to power a traffic light. Wasted.
WMT is the creature of balance sheet expansion in a low-interest rate environment in a capital-intensive industry to gain scale. But once interest rates rise and cash flows go negative for a few quarters in a row, the full picture will come into view of how silly this is.
It’s like finding a use for used nuclear waste, an answer to a question that shouldn't have been.
Since the 50’s cities this suburban idea is flawed. The whole commute 60mins each way by SUV to downtown work, stop by the walmart on your way home to your nasty vinyl sided $800k spec home. This model sucks and it does not work, its stupidity incorporated.
Want to live in the country, be a farmer, want to work in the city, live downtown.
Driving/commuting is work count it as such. 60min trip to work X 2 X 5 X 47 weeks= 470 hours extra a year X $24.50 avg. wage ($50kyr/40hour week)= $11,298.00 yr
10 hours a week wasted in traffic. Wow, how fucking precious is living in my vinyl house built by mexicans with glued together bits of wood, tape, Styrofoam and plastic.
At least they sprang for the laminated hardwood (a picture of a piece of wood glued on top of compressed cardboard that comes in strips).
Fact: Back in the day, it used to be upscale or fancy if you had carpet, most had just bare hardwood floors, used to be that wallpaper was a sign of wealth, because you could afford to cover you walls other than whitewashing them, used to be a dollar was redeemable in gold. How far we have come.
I can't find any empathy for WalMart.
Wal-Mart used to be the "dollar store" of the 1990s - no more... that's getting too expensive for the typical American; hence, the empty Wal-Mart shelves.
Welcome to the race to the bottom. Dollar stores seem to be popping up everywhere - goodbye mom and pop shops and cutsey little specialty boutiques on cobbleston paths. America has sold its soul oversees. Americans without work can still afford cheap plastic crap from oversees that reek of the cheapest quality plastics. mmm... can you say BPA? What a pretty hormone disruptor - then guys wonder why they grow bitch tits...
America is turning into an ugly country.
"Unemployment must increase if my Administration is to be successful. Today, I am seizing GE and firing all its workers. Their new EBT cards will rescue Wally World."
--Vladimir Hussein Skeeter
Here's an idea. You put a 50 foot high wall completely around each Walmart property. Lay down another foot of slab and make above ground local land fills out of each store location.
Walmart is famous for telling their suppliers what they will pay for their items. They pretty much have them over a barrel. Could it be that their suppliers are facing inflationary pressures that are so bad they can no longer afford to do business with WMT, and are instead shipping their items to retailers who don't bend them over? If they aren't making a profit selling to WMT, why would they ship them their goods? If this is true, which I suspect is likely, Walmart is going to have to raise their prices and pay these suppliers more money to get their goods back into their stores. If that is the case, we could REALLY start to see inflation now.
Having Walmart as your biggest customer could be suicidal!
I know a lot of women, myself included, who refuse to shop at Wal-mart. It's too expensive for people on food stamps who are now going to places like dollar store or Aldi's. Those who are doing ok go to nicer places.
At least here the claim of low prices is a ruse. Pricing appears near identical to Target, or regular grocers on average. WM is running ads claiming that people save by shopping with them instead of regular grocers, but then if you really look at the receipts used they are odd, as in an odd assortment of cherry picked items (duplicates of same product in different sizes, not representative of most people in variety, etc.).
I do better shopping Aldi and the sales/specials at regular stores. WM is a rare visit, usually because my MIL insists on going there.
Gotta love this recovery. That's why the price of gas is so high you know.
Where I live in Florida, Aldis and Save a lot have better and less expensive product, especially produce.
JC Penney misses. Walmart is sliding. Dow Jones hourly is in vertical ascent.
http://bullandbearmash.com/chart/dow-jones-hourly-vertical-climb/
Looks like another quarter of market tinkering courtesy the Fed. Thanks Ben.
PS: Europe is up about 0.5% across the board. Excellent.
Shelves still full of inferior "substitute goods" next to empty shelves that SOMETIMES have the items I am willing to buy. Walmart has always refilled "preferred goods" shelves at a slower pace in order to force consumers to buy the "substitute". This is not a strategy for free market success.
A dying society isn't a pretty thing...
I think my WeiMart has subterranean entrances because the customers appear to be Moorlocks.
if you shop at wall mart you have to understand: you will not be with the beautiful people..and most smell bad and spandex is horribly abused..missing teeth, tats, nose rings, and ragged children under foot..bring a purfumed silk to avoid the offensive air.
This could be a case of Walmart's success working against them. A few years back I spoke at length to a Walmart buyer while flying from the east coast to the west coast. She explained in some detail how their massive purchasing power allowed them to dictate terms to their suppliers. No one wants to be left out of Walmart and their enormous sales potential she told me. She told me of their "net never" terms. She went on to explain that they frequently had net 6 months terms with vendors and the 6 month period did not start until the goods were processed into their inventory system, which often took several months from the time the goods were delivered to the warehouse. I would not be surprised if many vendors cash flows had dropped to the point where that those terms simply no longer worked for them and thery were re-directing their products to merchants who paid quicker. No real verification for her story, but she seemed sincere and knowledgeable. It was also a few years back when this conversation took place so who knows. I personally despise what Walmart has turned into since the old man died. I remember when Walmart was considered a model retailer and employer. Now it is just a profit mill for the old man's heirs. Pretty sad.
It is as she said. And producers have a choice, they can not operate at a loss. They can not give Walmart a 240 day loan on their money at their expense when the "profit" on sales to Walmart is non-existent. They downsize to supply to those with whom they can work to provide an adequate profit for each of them. Everyone else they cut off. Walmart has gone off the cliff, air below. Too bad, so sad (not).
Does stealth inflation bring about stealth shortages?
Over the past few years everyone has been wondering how producers would handle their costs rising when they have no pricing power in market. We've seen the reduction in package content and other manipulations. Well, here's another means: cut off unprofitable business relationships.
Wow, an actually upside to total economic collapse. The demise of walmart.
Food prices have gotten insane. Went to a local grocery store (not WM) and bought very few things, chicken, some pet food, etc. all store brand cheap stuff, maybe 4 plastics bags of stuff - total, and it still cost $60.00!!!!! We are truely fucked!!!
yup
This is not a mystery. WalMart's business model is to offer the lowest prices on everything. If a supplier can get a better price from somebody else, they're not going to do business with WalMart. It used to be the case that WalMart could get suppliers anyway because they moved a lot of volume, but they have moved so far down-market that they inhabit the space where nobody has any money. In short, WalMart have reached the zero-market, so they have no pricing power with suppliers any more. Their business model has hit the wall, and there is no putting it back together.