Wal-Mart Sales Revenues Is Actually Clouding The US Economic Recovery Predictions

Because of how huge Wal-Mart really is, economic analysts like to pay very close attention to Wal-Mart sales revenues. Wal-Mart sales revenues are used as an indicator of consumer spending and the health of the economy. Many sales reports coming from leading retailers have been meeting expectations. More hours, more paying, and more hiring has been shown by sales reports. Target’s sales are up while Wal-Mart’s sales are down. But officials from both of the companies are saying that the consumer comeback that many are hoping will drive the U.S. economic recovery from the Great Recession may not be sustainable.

Article Resource: Wal-Mart sales revenue clouds U.S. economic recovery predictions

Report on Wal-Mart sales

In a normal week, Wal-Mart has around 100 million shoppers. More than $ 400 billion in annual sales are generated by shoppers with extra cash. CNNMoney.com reports the Wal-Mart sales report shows revenues worldwide rose 6 percent to $ 99.1 billion, which definitely beat analysts’ forecasts of $ 98.45 billion. Sales at Wal-Mart stores open at least a year — a key metric of retail performance called same-store sales — fell 1.4 percent in the three months that ended April 30. In the same period a year ago, same-store sales rose 3.6 percent. A 1.6 percent decline in the fourth quarter is what these sales are following.

2010 Wal-Mart sales revenues

Wal-Mart has reported in the sales report logs the company’s fourth quarter of dragging US sales. The Wall Street Journal reports that Wal-Mart predicted that its U.S. sales would continue to be sluggish this summer when taking into account the working-class customers who form Wal-Mart’s base still reel from the effects of the recession on their finances. Rising gas prices and unemployment heading into the summer cloud the Wal-Mart customer’s outlook even more.

Target and their sales revenues

Something about US economic recovery in 2010 is indicated by Wal-Mart vs. Target sales revenues. Target, as the Wal-Mart rival, reported a 29 percent increase in the first quarter of their income. The Associated Press reports that Target’s rising sales revenues are a huge sign that the retail chain is drawing a ton of customers away from competitors such as Wal-Mart. However, during a conference call to a few different investors, Target Chairman and CEO Gregg Steinhafel said “Clearly, the economy and consumer sentiment have improved since the weakest point in 2009, but we believe that both are still somewhat unstable and fragile and will likely continue to experience occasional setbacks as the year progresses amid a stubbornly high jobless rate.”.

U.S. economic recovery 2010

During the Great Recession, Target, a Wal-Mart type store, took a big hit. Wal-Mart’s sales and profits rose during the recession as cash-strapped Americans left supermarkets and department stores in search of bargains. But as the economy gets better, Wal-Mart appears to be losing the new customers it won during the downturn. Based on sales figures, many of those customers have taken a baby step up to Target.

Recovery predictions for US economy

Wal-Mart might just start having to pay if they want US economic recovery to be sustainable. According to The CNNMoney.com article, retail sales expanded over the last seven months because 40 percent of current spending comes from 20 percent of the highest incomes. Plus, events like the stock market Flash Crash and European debt crisis have caused the rate of the retail sales increases fueled by the more affluent households has slowed since March.

Long, strange U.S. economic recovery

More work and money is going to be needed by Wal-Mart’s customer base if they are to shore up the sputtering economic recovery. The U.S. unemployment rate stuck at nearly 10 percent, the underemployment rate is increasing, wages decline for people who can find work and inflation-adjusted income is flat. With the current rate of economic growth it will take at least three years to bring the unemployment rate down to be below 6.3 percent, where it was at the peak of the 2001 recession.

Economic recovery for US headwinds

Wal-Mart’s troubles, the retail sector’s outlook and the health of the economy at large are facing what the president of the Federal Reserve Bank of Cleveland, Sandra Pianalto, calls a “powerful headwind.” As reported in The Washington Independent, Pianalto said a heightened sense of caution is driven by deep uncertainty that the standard of living Americans had become accustomed to will return. Consistent prosperity broken by two very brief downturns is what people who began their working careers in the mid-1980s experienced. As a result of this long and deep recession, expectations have shifted.

More information on this topic

CNNMoney.com reports

http://money.cnn.com/2010/05/18/news/companies/Walmart_earnings/

Wall Street Journal reports

http://online.wsj.com/article/SB10001424052748703957904575252092724864622.html

Associated Press reports

http://www.google.com/hostednews/ap/article/ALeqM5j8Dci3cCwl1keQZphuso3G1zEb0wD9FQ5I6O1

As reported in The Washington Independent

http://washingtonindependent.com/85251/fed-president-predicts-a-long-slow-recovery

« Double-dip Recession: Will It Wreck The Auto Industry? | Home | New Obsession: Hello Kitty Wine »