First it was McDonalds and now it is Wal-Mart. It doesn’t matter whether you love them or hate them, they are the canary in the coal mine. Wal-Mart has revenues larger than the GDP of most countries. They are the retailer of the 90%, just as McDonalds is the restaurant of the 90%. The average person is losing ground rapidly. The payroll tax increase took a chunk out of their monthly disposable income. Filling up their gas tank costs 10% more than it did two months ago. Food prices go up every day through the reduction in quantity in the packages. They think we’re stupid.
The outrage is over an executive actually telling the truth. I’m sure their are emails among the Wall Street banks about their insolvency that would open a few eyes. The powers that be in this country continue to pillage and loot through their control of the financial system, while the little guy sinks deeper and deeper into debt and despair. There will be hell to pay when the shit hits the fan. Meanwhile, just watch the MSM mouthpieces tell you about the great economic recovery as reflected in the all-time stock market highs.
Wal-Mart Executives Sweat Slow February Start in E-Mails
Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.
“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”
Wal-Mart and discounters such as Family Dollar Stores Inc. are bracing for a rise in the payroll tax to take a bigger bite from the paychecks of shoppers already dealing with elevated unemployment. The world’s largest retailer’s struggles come after executives expected a strong start to February because of the Super Bowl, milder weather and paycheck cycles, according to the minutes of a Feb. 1 officers meeting Bloomberg obtained.
Murray’s comments about February sales follow disappointing results from January, a month that Cameron Geiger, senior vice president of Wal-Mart U.S. Replenishment, said he was relieved to see end, according to a separate internal e-mail obtained by Bloomberg News.
“Have you ever had one of those weeks where your best- prepared plans weren’t good enough to accomplish everything you set out to do?” Geiger asked in a Feb. 1 e-mail to executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”
Shares Fall
Wal-Mart fell 3.3 percent to $68.46 at 2:12 p.m. in New York and earlier slid as much as 3.8 percent for the biggest intraday decline since Nov. 15. The shares rose 14 percent in the 12 months through yesterday, compared with an 8.5 percent gain for the Dow Jones Industrial Average.
“As with any organization, we often see internal communications that are not entirely accurate, that lack the proper context and represent individual opinions,” David Tovar, a Wal-Mart spokesman, said in an interview, adding that the company will report fourth-quarter earnings on Feb. 21. Wal- Mart’s fourth quarter ends in January.
Murray and Geiger didn’t immediately return telephone and e-mail messages seeking comment.
Both executives attributed the performance to increased payroll taxes and delayed tax returns, which Geiger called “a potent one-two punch,” according to the e-mails.
About $19.7 billion more in tax refunds had been delivered to shoppers by this time last year, according to an analysis prepared by Wal-Mart’s Global Customer Insights & Analytics division that was attached to Murray’s e-mail on Feb. 12. The retailer expected returns to be delayed by three to four weeks because of the late release of tax forms and additional, federally mandated tax-fraud scrutiny.
Payroll Tax
When a payroll-tax break expired Dec. 31, Americans began paying 2 percentage points more in Social Security taxes on their first $113,700 in wages. For a person making $40,000 a year, that is about $15 a week.
The extra tax bite is about equal to a year of car insurance for a family making $30,000 or a basket of groceries per month for a family making $50,000, according to Wal-Mart’s analysis.
Other retailers who court low-income Americans also are bracing for the rising taxes.
Higher payroll taxes “go against our customers’ wallet,” Family Dollar Chief Executive Officer Howard Levine said on a Jan. 3 conference call. “Clearly, they do not have as much for discretionary purchases than they did.”
Wal-Mart’s Geiger in his e-mail urged employees to improve business by “fixing something that could really make a difference to our performance.” He quoted Tim Yatsko, the company’s executive vice president of global sourcing, saying: “We need to ‘stop the stupid.’”
‘Biggest Risk’
Wal-Mart U.S. CEO Bill Simon said during a Feb. 1 officers meeting, the minutes of which were attached to Geiger’s e-mail, that the troubled economy leaves little room for internal errors.
“In an environment like this, we can’t afford to hurt ourselves,” Simon said, according to the minutes. “Self- inflicted wounds are our biggest risk and our toughest enemy.”
Simon cited negative economic growth, declining consumer confidence and rising unemployment as challenges facing the company. The U.S. economy shrank at a 0.1 percent annual rate in the fourth quarter, and the unemployment rate rose 0.1 percentage point to 7.9 percent in January. The Conference Board’s measure of consumer confidence declined last month to the lowest since November 2011.
Even with a slow January, Wal-Mart is gaining market share steadily, Simon said.
“That points to our competitive landscape, which means everyone is suffering and probably worse than we are,” Simon said, according to the minutes.
The company must focus on process and execution, he said.
“We have to fight against the tougher economic environment to earn a bigger share of a smaller consumer spending pie,” Simon said, according to the minutes.
bluestem says:
Only so much money for the month, when will Obama realize that? John
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15th February 2013 at 3:38 pm
Stucky says:
Permit me this small diversion ….. a Stucky Stock Tip
DO NOT INVEST IN 3D PRINTING TECHNOLGY !!!!!!!!!!!!!!!!!
IF YOU INVESTED IN 3D PRINTING TECHNOLGY …….. GET OUT NOW !!!!!!!!!!!!!!!
I did not watch the Obama Fanatsy show. However, I just discovered that in the SOTU Obama mentioned 3D printing as one of several emerging technologies that might help revitalize US industry.
This can only mean ONE thing ………. the 3D printing industry is now officially fucked!!
(Please subscibe to my $300 annual newsletter for more details.)
fuck fuck fuckity fucked
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15th February 2013 at 3:43 pm
AWD says:
The slowdown at Wal Mart comes in the face of 39% of their business is the FSA, which are getting benefit increases. It shows just how bad working people are getting screwed.
We’re going the way of France very quickly. The socialists (there are here) are taxing people to death, and increasing the size of government and public employees. Investment capital will flee the country, and pretty soon the Socialists run of of other people’s money.
More taxes and more government spending (especially for the FSA) will fix everything.
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15th February 2013 at 3:52 pm
card802 says:
Stucky the contrarian.
Sigh……….where do I send the check. You do take checks?
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15th February 2013 at 3:55 pm
AWD says:
Wal-Mart Says February Sales “Total Disaster”, Worst Monthly Start Since 2006; Stock Drops
Submitted by Tyler Durden on 02/15/2013 – 14:11
Wal-Mart shares are plunging as the firm reports a ‘total disaster’ in its February sales. Bloomberg obtained internal emails that note:
“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal-Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company…. That points to our competitive landscape, which means everyone is suffering and probably worse than we are”
Things must not be serious over in Bentonville for this much truth to suddenly hit the tape. One senior executive summed it up perfectly – “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?” The company notes the end of the payroll tax cut by Obama and asks “We need to stop the stupid.”
And here’s the stupid that needs to be stopped:
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15th February 2013 at 3:56 pm
JIMSKI says:
2% bullshit
Add that to our City tax going up, our school levy which passed hit in January, and suddenly my base check is 5% less than last years weekly check.
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15th February 2013 at 4:10 pm
Administrator says:
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15th February 2013 at 4:17 pm
Anonymous says:
They say the truth will set you free. No where is that more true than in corporate America, where an honest email might very well cost you your job.
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15th February 2013 at 5:03 pm
Work-In-Progress says:
Come on Admin, the economy is doing better. People are making enough money that they are now shopping and eating at nicer places.
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15th February 2013 at 5:40 pm
Randa says:
Well it looks like psychobama just started world war 3 today. That was not a meteorite that exploded in Russia or in the skies over Cuba. It was an American missile(s) and I reckon Obama just blew his balls off (pun intended).
http://rt.com/politics/zhirinovsky-meteorite-american-weapon-316/
Putin is mad.
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15th February 2013 at 6:05 pm
Administrator says:
Posted 2013-02-15 14:34
by Karl Denninger
Obama: “Economy is improving” — WalMart: Bullcrap!
Largely if not entirely-responsible for the nice little dive we’re seeing in the market is likely this:
Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.
“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”
Disaster?
That wasn’t what we were told, remember? The economy was getting better. Consumer spending is rising, supposedly. Things are ok. The Empire index was good this morning. Consumer confidence is ok.
Uh huh. WalMart says otherwise, and they’re looking at actual data.
And what that email said is, and I quote:
“Have you ever had one of those weeks where your best- prepared plans weren’t good enough to accomplish everything you set out to do?” Geiger asked in a Feb. 1 e-mail to executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”
That’s easy. The customers are not in the stores because they don’t have any damned money!
Guess who’s responsible? CONGRESS, with its DEFICIT SPENDING.
This results in immediate destruction in purchasing power and that in turn screws the common man blind.
And now you have the results “in your face.”
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15th February 2013 at 8:03 pm
StokeyBob says:
I sort of figure their money was snatched away from them by the counterfeiting of their currency. When they fire up the fake money presses they don’t really add anything to our pile of stuff, they just shift the property lines over in their favor.
Remember, no matter how much hard earned money the, “We the People” can come up with to build their world the way they want there are others that can fire up the fake money presses and print up what ever amount it takes to get their way.
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15th February 2013 at 1:51 am
card802 says:
Most people I try to talk to don’t understand/comprehend the economy and our way of living will not just end abruptly into chaos, food lines and dust bowls. So because we’re still riding high, they believe/think that things are just fine and dandy.
Too many variables, it’s too large, so there will be small signs like Walmart or McDonald’s or, or, or and a gradual change.
Sort of like when the shocks on your car start going bad. You just don’t notice until the car hits that pot hole, then everybody riding along feels the jolt and then you hit the next hole, and the next, you look around the car and think, Why didn’t we notice the car swayed dangerously on curves, the car bounced a little too much, all that up and down motion was just not normal. Big dad said it was all right.
Then it’s too late because the road has ended and the shop is closed. Time to get out and walk.
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15th February 2013 at 6:40 am