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What "Rosy" Job Numbers? Wal-Mart CEO Slams Recovery Mirage

Tyler Durden's picture




 

When the CEO of the world's biggest company doubts the veracity of US economic data, you know you have a problem. After quarters of disappointing growth in the face of miraculous equity market performance; Wal-Mart CEO Bill Simon warns that shoppers aren’t returning at the pace one might expect years after the recession peaked, despite mainstream media interpretation of the data showing unequivocal growth. Simply put, he exclaims, "the unemployment numbers particularly have been difficult to read with the number of people dropping out of the work force," adding that if we see a further drop in the participation rate it would fit with the fact that "middle-class and lower-class are still economically challenged, only spending during holidays and for family occasions," adding that traction has only come at the top-end.

 

 

CNBC: "The US unemployment rate fell 6.1%. but walmart sales and traffic has been pretty sluggish. what's going on? where's the disconnect?"

Wal-Mart CEO: "I think the economic numbers - unemployment numbers particularly have been difficult to read with the number of people dropping out of the work force - and I think it's going to take a while - six months or a year - for those numbers to balance out. You'll see drop in the rate, and then - as more people come back into the workforce - that might change again. Hopefully after six years we start to gain traction in the US. That traction is coming at the top end but I think the middle down is pretty challenged.

CNBC "Is that the problem with sales, your consumers don't have as much disposable income to spend?"

Wal-Mart CEO: "Yes - Retail in general has not been robust in the last six years, in the last year particularly."

*  *  *

“This is obviously an economic problem,” said Gina Sanchez, founder of Chantico Global. “Wal-Mart is a big bellwether, so it’s worth looking at to understand what’s happening.”

*  *  *

This is not a tin-foil-hat-wearing blogger or ranting Chicagoan (or former GE chairman) - this is the current CEO of the world's largest revenue-producing firm casting doubt on the reality of the jobs picture the government is painting and furthermore confirming things are anything but back to normal...

 

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Tue, 07/08/2014 - 20:08 | 4937638 Roger Shermanator
Roger Shermanator's picture

The goverment's solution? Create more holidays and family occasions.

Tue, 07/08/2014 - 20:19 | 4937676 Duffminster
Duffminster's picture

Perhaps Wallmart should boost their wages and set an example for other companies.  Then the working and middle class would have a bit more to spend at Wallmart.

Did anyone see the article at the Financial Times

Short selling drops to lowest level since Lehman

http://www.ft.com/intl/cms/s/0/b5445190-069c-11e4-8c0e-00144feab7de.html#axzz36ucddLPS

 

Is this bullish or bearish?

Tue, 07/08/2014 - 20:23 | 4937707 Da Yooper
Da Yooper's picture

The Ford Motor Company of retail

 

ewwwww

 

Is that bullish or bearish ?

 

I just replaced the rear leaf spring mounts on my van because they rusted away.

not good

Tue, 07/08/2014 - 21:01 | 4937810 ZerOhead
ZerOhead's picture

I'm surprised that Obama hasn't sent Walmart some BLS accountants to help them massage their numbers.

 

Nothing would trigger a stampede faster than a couple of quarters of declining sales. Especially to the sporting goods section where they sell the ammo...

Tue, 07/08/2014 - 21:19 | 4937893 El Oregonian
El Oregonian's picture

Nothing but a big fat joke! The economy is dead. The future prospects are bleak. Our leaders are all lying. Stick a fork in it, we're done, folks...

Tue, 07/08/2014 - 21:27 | 4937927 economics9698
economics9698's picture

Duffminister Hoover boosted wages, worked real well.  /sarc

Tue, 07/08/2014 - 23:43 | 4938398 SF beatnik
SF beatnik's picture

 

Zerohead

 

Especially to the sporting goods section where they sell the ammo...

 

 

What ammo?  Here in CA try finding .38, .357, .22LR. Nowhere to be found. Feds buy it all, now. Don't want you to have any. 

 

Wed, 07/09/2014 - 20:22 | 4941541 mkkby
mkkby's picture

A couple of months ago I bought 2 of those callibers at walmart.  They had plenty and I wasw the only one shopping that section.

Tue, 07/08/2014 - 21:30 | 4937942 NoPension
NoPension's picture

If they found a way to consistently keep their ammo shelves stocked ( .22, .223, 9 mm, .45), that alone would probably level off the numbers.

Tue, 07/08/2014 - 23:38 | 4938389 Salsipuedes
Salsipuedes's picture

And a kush kiosk! (None of it will help but it might make it more memorable.)

Tue, 07/08/2014 - 20:29 | 4937722 crazybob369
crazybob369's picture

AAAAAAAAARGH!!! You people drive me crazy with this Walmart/McD/Exxon/fill in blank, should do this, or do that and we'd all live happily everafter. Company's do what they do based on consumer demand. Consumers demanded cheaper and cheaper crap that Walmart,etc. happily provided by going overseas (China) and paying local workers the least they could get away with. WE ASKED FOR IT! Want to blame anyone, look in the mirror if you shop at Walmart. If you don't, look at pretty much any random person you walk by, I guarantee you that they do. We did this to ourselves. We screwed ourselves in the butt, now we complain that it hurts. What did you expect?

Tue, 07/08/2014 - 21:06 | 4937837 ZerOhead
ZerOhead's picture

The current situation is way beyond anything that can be "helped'.

It's tear-it-down and redesign it time.

P.S  End the Fed.

Tue, 07/08/2014 - 23:34 | 4938380 Salsipuedes
Salsipuedes's picture

'Tis all terribly sad and painfully true. (Except the Fed part).

Tue, 07/08/2014 - 23:49 | 4938406 SF beatnik
SF beatnik's picture

We have WAY too many people for private sector work to be decently monetized.

Hence, millions of Americans working p.t. for minimum wage. Means no discretionary income.

And Obama lets in MORE uneducated, unskilled people to fight over shit jobs? WTF? Is this a deliberate effort to destroy our nation?

 

Wed, 07/09/2014 - 19:30 | 4941375 daveO
daveO's picture

Yes. It reminds me of the Cuban boat 'crisis' when Carter was in office. It's been done before.

Wed, 07/09/2014 - 20:25 | 4941548 mkkby
mkkby's picture

BINGO... WE HAVE A WINNER.  Yes, there are way too many people than there can ever be useful work.  In the US it's probably 2:1.  Globally more like 10:1.

Watch out for that walmart CEO asshole.  All he's doing is complaining his customers (ie free shit army) need an increase in benefits.  How can this poor honest businessman increase his sales if welfare queens don't get regular raises.  /s

Wed, 07/09/2014 - 19:29 | 4941372 daveO
daveO's picture

Corporate Congressional whores gave them MFN in 1999. Along with the '2 for the price of one'(yes, he said that) Clintons. How many times did the Chinese rep's sleep in the Lincoln bedroom? The sheeple went right along with the lower prices as long as they had jobs. Oops. 

Tue, 07/08/2014 - 21:21 | 4937890 Mike in GA
Mike in GA's picture

 "Is this bullish or bearish?"

 

                                  Yes!

Tue, 07/08/2014 - 20:26 | 4937713 Cruel Aid
Cruel Aid's picture

Import Walmart customers. The new lower and middle class are being processed as we write.

Tue, 07/08/2014 - 20:33 | 4937737 Da Yooper
Da Yooper's picture

The HNIC is

Tue, 07/08/2014 - 20:38 | 4937752 Miffed Microbio...
Miffed Microbiologist's picture

Well that may help the permethrin cream and Rid sales but I'm not sure if they can afford it. I guess we need another subsidy. I'm sure Walmart won't protest the idea.

Miffed;-)

Tue, 07/08/2014 - 20:55 | 4937812 Cruel Aid
Cruel Aid's picture

Oh walmart benefits directly from free money. Not the dow 17k effect but the ebt effect.

Free now pay later... holy shit Batman this time its different.

Ebt comes in the welcome packet.

http://en.wikipedia.org/wiki/Electronic_Benefit_Transfer

Thu, 07/10/2014 - 20:45 | 4945764 TheRedScourge
TheRedScourge's picture

They would make a decent profit with or without the existence of the EBT program. Don't shoot the messenger.

Wed, 07/09/2014 - 13:39 | 4940222 Mitzibitzi
Mitzibitzi's picture

I'll go you one better; they'll pass a law stating that anyone holding funds or unused hard assets in excess of a few hundred dollars value for a consistent period of, say, 90 days, is amassing funds for anti-capitalist / anti-government purposes. Then they'll be 'visited' by an agent and given maybe 72 hours to spend/dispose of them in a commercially beneficial fashion (which will be defined as you have to walk into a store and buy new shit - no second-hand, yard sale, ebay, etc allowable!). If you don't do so in the allotted time frame, and produce a pretty convincing receipt to prove it, the funds and assets will be subject to immediate seizure as a penalty for non-compliance.

Just you wait. Something along those lines in in the pipe, I betchya!

Tue, 07/08/2014 - 20:11 | 4937650 Duc888
Duc888's picture

 

 

Wait till interest rates spike.  He's gonna get a Chinese enema.

Tue, 07/08/2014 - 20:16 | 4937672 pupdog1
pupdog1's picture

An hour later, he'll want another one.

Wed, 07/09/2014 - 12:45 | 4940007 GoldRulesPaperDrools
GoldRulesPaperDrools's picture

LOL!!! Okay, so I gotta ask ... how is a Chinese enema different from a regular one?  Do they use hot soy sauce instead of water? ;)

Tue, 07/08/2014 - 20:13 | 4937655 buzzsaw99
buzzsaw99's picture

WalMart, the leader in gutting America like a fattened hog. Then, when the going got rough they turned into the biggest welfare baby on the planet top to bottom. Get fucked MalFart.

Tue, 07/08/2014 - 20:21 | 4937693 Da Yooper
Da Yooper's picture

other people will soon run out of "THEIR" own money

 

Then China mart be really fucked

 

They going to learn they cant do business with people who have no MONEY $$$$$$$

Tue, 07/08/2014 - 22:16 | 4938150 laomei
laomei's picture

China has a play it is currently in the process of making.

"China mart", sells garbage for export because that's what the importers demand at rock bottom prices which result in razor-thin profits for the actual makers.  The parasitic importers then slap a sticker on it, apply brand pricing standards to it and charge a healthy 10x the import cost.  A "sale" might be cutting that markup to a mere 5x cost.  As a result of this, China really does not have much care for the US export market.  But... what if factories make higher quality, sell it direct under their own brand at a mere 2~3x cost?  That's what is happening now.  The parasites are screwed.

Tue, 07/08/2014 - 23:28 | 4938364 Salsipuedes
Salsipuedes's picture

That would be lovely. Except, how much shit of any kind do we really need?

Wed, 07/09/2014 - 01:25 | 4938529 laomei
laomei's picture

You fail to understand... the whole "american way of life" is based on acquisition of shit.  Down to the oversized homes made of cardboard designed explicitly to store the surplus shit.  When that is overloaded, there are even shit-storage units.. that's an actual sector.  After ther 70s when things started going to hell, there was a push to get dual-income seen as normal... to supplement this buying of shit.  Once that failed to keep up it went to credit cards, then to HELOC.  You see, failing to buy shit means failure to "keep up with the Joneses", which means "you're poor".  Americans simply cannot afford domestic shit anymore, offshoring it allows for it to go unnoticed by most.  The big brands see crazy profits, the consumer gets to keep living the lie.  What happens when the brands, who are nothing more than parasitic middle men get cut out? You see, the US economy literally relies 100% on people buying shit they do not need.  There will be another "new normal" as direct sales become more common, allowing for lower prices and then it gets interesting.  In the 80s it was all about Japanese cars getiing rebadged as domestic... and the end result was the death of the US makers once the rebadging ended.  You'll be seeing the deaths of many US brands in the near future.

Wed, 07/09/2014 - 19:21 | 4941345 daveO
daveO's picture

You can find examples on Ebay. The Chinese are selling many things directly, now. It won't take long for the Corporate Congressional whores to propose tariffs, now. Now that there's no real domestic competition.

Fri, 07/11/2014 - 01:23 | 4946373 laomei
laomei's picture

It's really easy to circumvent tariffs though, I mean, really easy.  To the point that the costs associated with attempting to enforce them will exceed any revenue gained.  Furthermore, it would only encourage direct shipping, of which some would get caught and taxed, and most of it not.  The perception then shifts from blaming the brand for high prices, to the government for essentially stealing money.  The entire sector is going to be cannibalized and there's nothing anyone can do to stop it really.

Tue, 07/08/2014 - 20:30 | 4937726 Dr. Engali
Dr. Engali's picture

I think there is a lesson in there somewhere.

Tue, 07/08/2014 - 21:24 | 4937912 buzzsaw99
buzzsaw99's picture

obviously they aren't learning anything: http://www.zerohedge.com/article/wal-mart-ceo-shoppers-are-running-out-m...

it's deja vu all over again.

Tue, 07/08/2014 - 21:38 | 4937986 stormsailor
stormsailor's picture

must be yogi berra day,  if you come to a fork in the road, take it.

Tue, 07/08/2014 - 20:14 | 4937661 grunk
grunk's picture

"We aren't getting enough government money."

Tue, 07/08/2014 - 20:14 | 4937665 Rinzler
Rinzler's picture

Bullish.

Tue, 07/08/2014 - 20:16 | 4937669 SHEEPFUKKER
SHEEPFUKKER's picture

Dear Billy boy- when your workers can't even afford to shop in your own stores, then you've got a problem I'd say. 

Tue, 07/08/2014 - 20:18 | 4937683 Da Yooper
Da Yooper's picture

Yep & that day is coming

Wed, 07/09/2014 - 06:29 | 4938694 Chuck Knoblauch
Chuck Knoblauch's picture

It will be someone else's problem.

Tue, 07/08/2014 - 20:25 | 4937702 pupdog1
pupdog1's picture

Nice try at diffusing focus from how you changed what was a good/great store chain 15-20 years ago into total devil-spawn shit today.

You got rid of every  quality product you used to sell, and replaced them with ching-a-ling crap that's defective right out of the box.

And two checkstands open for a store the size of a goddam football field.

All of which goes to the bottom line--your bonus.

It's not complicated Bill, you two-bit grifting ponce.

Tue, 07/08/2014 - 21:04 | 4937834 The Most Intere...
The Most Interesting Frog in the World's picture

How long before there are no employees in the stores? Shopped at Large grocery store earlier one of those huge MFs and there were a shitload of people shopping n like hardly anyone working there. If I could figure out how to weigh and measure fruits and veggies I could check out on my own. Gonna start growin em myself that would be easier...

Tue, 07/08/2014 - 22:30 | 4938194 franzpick
franzpick's picture

How long before there are no SHOPPERS in the stores? is the question.

Except on bi-weekly paydays and the monthly midnight EBT crowd,  our WalMex empty aisles now look like a bomb scare.

WMT store racks have shown many empty shelf spaces since 2009: I told the manager then how bad it looked, and he explained then that WMT had eliminated their in-store warehouses, and were saving money by relying on "Truck-to-Shelf" delivery.

Worse, our likely-soon-to-be-closed WMT sits right next to the biggest, closed, defunct, ghost retail store anyone has ever seen - the relatively new, 8 year old, desert cities CA, Sam's Club, closed 4 years ago after the post-Lehman retail collapse.

Closing our failing WMT, adjacent to the already closed Sam's Club, razing the 2 buildings and clearing the parking lot fixtures - would provide already paved space for a new desert cities metropolitan airport.

To bring in 1000s of disadvantaged latin american children per day, for processing at the nearest ICE center

Wed, 07/09/2014 - 01:22 | 4938526 pupdog1
pupdog1's picture

I hope your new airport has ebola scanners.

Tue, 07/08/2014 - 20:26 | 4937712 nmewn
nmewn's picture

CNBC: "The US unemployment rate fell 6.1%."

First issue in the CNBC Most Retarded Mirage Challenge Question posing as a statement of fact is...

...what is U-6?

(Its 12.1%,)

Tue, 07/08/2014 - 20:39 | 4937729 Termin8or
Termin8or's picture

dronning near Bentonville coming in 5.... 4... 3.... 2....

Fri, 07/11/2014 - 05:15 | 4946511 sethstorm
sethstorm's picture

...and not a thing of value was lost.

Tue, 07/08/2014 - 20:31 | 4937733 AcidRastaHead
AcidRastaHead's picture

I choke-laughed at the picture before I even saw the headline. Then after I read the article and saw that people are saying "hey, I don't think things are as good as they're represented to be, well then I sigh-laughed.

Tue, 07/08/2014 - 20:37 | 4937751 CashCowEquity
CashCowEquity's picture

Blame the Weather

Blame Bush

:p

Tue, 07/08/2014 - 20:39 | 4937750 grunk
grunk's picture

"How do you expect us to be competitive without government intervention?"

Tue, 07/08/2014 - 20:41 | 4937759 1stepcloser
1stepcloser's picture

Offer no limit ebt Tuesdays govmart

Tue, 07/08/2014 - 20:42 | 4937762 world_debt_slave
world_debt_slave's picture

hopium is alive and well

Tue, 07/08/2014 - 20:45 | 4937774 eyes wide open
eyes wide open's picture

One of the largest contributor to obamas reelection. Whores.

Tue, 07/08/2014 - 20:59 | 4937826 The Most Intere...
The Most Interesting Frog in the World's picture

WM is basically an extension of the government.

Tue, 07/08/2014 - 20:45 | 4937777 tahoeguy
tahoeguy's picture

Maybe people can start bartering with illegal mexican kids...  1 beaner = 1 cart full of groceries....

Tue, 07/08/2014 - 20:52 | 4937800 Umh
Umh's picture

Are they any good baked or is it better to barbeque them?

Tue, 07/08/2014 - 20:58 | 4937820 The Most Intere...
The Most Interesting Frog in the World's picture

You just gave me a good idea...

Tue, 07/08/2014 - 20:55 | 4937814 The Most Intere...
The Most Interesting Frog in the World's picture

Been in Wal Mart maybe two times in my life, which is a little longer than I care to admit, but they are getting like everyone else trying to serve that market. Wal mart, McDonald's, getting their asses handed to them despite the public assistance.

Tue, 07/08/2014 - 21:16 | 4937885 Make_Mine_A_Double
Make_Mine_A_Double's picture

Let's call a spade a spade.

Wal Hell's demo are those barely above subsidence level. And a good chunk of that is .gov transfer payments.

If this group is cutting back (and they obviously are) than the question is to what?

Dollar Stores and seeing same decreases across the board.

So my guess would be that inflation is now cutting deep enough to keep the prols to absolute necessities.

So Q2-3 should be pretty fugly and very hard to disguise.

Tue, 07/08/2014 - 21:23 | 4937910 orangegeek
orangegeek's picture

Walmart backed Barry in 2008 and 2012 to get a few stores into Chicago - no Walmarts in Chicago area prior to.

 

Well the terms of that deal are over.

 

Under the bus you go Barry. 

Tue, 07/08/2014 - 21:30 | 4937948 lunaticfringe
lunaticfringe's picture

Bill's had to cut some fat out of his diet. With only an 11.2 million dollar per year, or about a million a month salary, Bill's had to scrimp this year and I think he's getting a little ornery.

With the avg salary of a fulltime Walmart employee something like 18k a year, Bill makes the same amount of money as about 600 of his employees combined.

Not to mention those employees don't have access to coprorate jets or the millions of dollars Walmart used to bribe Mexican officials.

Same as it ever was and getting exponentially worse.

Tue, 07/08/2014 - 21:39 | 4937991 Pie rre
Pie rre's picture

Walmart has excellent prices on diabetic supplies. Since I don't have insurance I shopped around. Insulin is 25 per vile and test strips are 50 for 9 dollars.  Less than half of anywhere else but it's over the counter so insurance is no good which probably drives a lot of customers elswhere where they pay 1 buck for each test strip and 60 for insulin but they can use insurance.

Tue, 07/08/2014 - 21:49 | 4938032 stormsailor
stormsailor's picture

yesterday drove the blue ridge parkway from asheville to virginia.  i saw less than 50 cars, normally i would never drive the parkway during the month of july, bumper to bumper at 25  mph.  but a complete ghosttown yesterday.

 

its slowly getting worse, i think its reaching the desperation point in the  streets.  its easy to spot the fsa driving out of their section 8 in their new beemers and mercedes.  i hope they don't piss off somebody out here working 3 jobs to feed their kids in some rundown hovel, they might snap and beat them to death with a wal-mart baseball bat.

Tue, 07/08/2014 - 22:14 | 4938140 Lanka
Lanka's picture

How quaint: "economically challenged," aka flat broke.

Tue, 07/08/2014 - 23:16 | 4938336 Salsipuedes
Salsipuedes's picture

I was thrilled to learn that in the end, these people eat their children. So that's something.

Wed, 07/09/2014 - 00:37 | 4938471 yogibear
yogibear's picture

Dollar Tree stores are crowded. Buying birthday cards for  55 cents can't be beat. Also dollar tree has 4 button batteries for $1. Helium balloons for $1 each. They were packed last Christmas with people buying cards, wrapping, boxes, gift bags, all for $1.

WalMart is the price follower, not the price leader anymore. As the big stores become more pricey people with search for lower cost alternatives. Even used or second-hand items and furniture. 

Craigslist is a goldmine for furniture, autos and tools. The more pressure Obama and his bankster friends put on the 99% the more they will use alternative markets. This will hurt retailers because it's 70% of the economy and eventually the banksters.

Baby-boomers are also downsizing now and getting rid of stuff in their packed McMansions.  Plenty of hardly used stuff for the broke 20 and 30 somethings.

Wed, 07/09/2014 - 01:32 | 4938534 NoWayJose
NoWayJose's picture

I am still amazed that I cannot walk into a Walmart store and find a box of 22LR to buy. How can we have unemployment in the US when we obviously need more people to make ammo? And how about product mix at Walmart? Gun sales are up across the country, but the selection at Walmart sucks. Walmart might get more traffic if they sold what people are actually buying, rather than stocking 27 types of coffee makers.

Another poster also mentioned how Walmart has become a price follower. I agree. Walmart was the low price leader 4 years ago, and had the sales volume to prove it. If this CEO wants to know why traffic is down he should go shop at some of his competitors - and he'll be able to pick up some bargains too!

Wed, 07/09/2014 - 06:15 | 4938678 Chuck Knoblauch
Chuck Knoblauch's picture

THE TRUTH WILL OUT.

Wed, 07/09/2014 - 06:31 | 4938697 Chuck Knoblauch
Chuck Knoblauch's picture

EBT is not keeping up with the level of devaluation of the currency.

The death of the dollar has consequences.

Wed, 07/09/2014 - 07:04 | 4938730 AdvancingTime
AdvancingTime's picture

The implications of poor job creation are massive. The biggest may be that a huge number of people are dropping from the work force. Often these people have little in the way of savings, this means that the burden of caring for them will be transferred to society.

If to many people shift into this category we will slowly wear down through attrition. Finding a fair way to share and balance the work load that goes on every day may be one of the most important problems facing our modern world. Not discovering a solution to this dilemma bodes poorly for our consumer driven economy and adds to the toxic problem of inequality. More on the implications of unemployment in the article below.

http://brucewilds.blogspot.com/2013/09/implications-of-poor-job-creation...

 

Wed, 07/09/2014 - 12:58 | 4940074 RougeUnderwriter
RougeUnderwriter's picture

I Just came out of Wal-Mart with the $1 fresh french bread, motor oil and Air Cono refriderant. Walmart Rocks bone heads. It's even entertaining to watch the shoppers!

Wed, 07/09/2014 - 18:58 | 4941264 daveO
daveO's picture

But, they'll need to give away all that Chinese stuff to the former workers whose jobs have been outsourced and whose unemployment has run out. Wally world has milked the offshoring cow for all it's worth. Now, time to start closing some of their dairies. 

Fri, 07/11/2014 - 05:13 | 4946509 sethstorm
sethstorm's picture

Well, they're not exactly helping by being a contributory factor to adverse actions on both the supplier and consumer sides.  Even if Wal-Mart cites the absurd applicant acceptance ratios, it only underscores the problems of the company.

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