Wal-Mart may be its own worst enemy

It's blaming a weak outlook on consumers cutting back. But then why are so many of its retailing rivals doing just fine?

By Jonathan Berr Feb 21, 2013 1:58PM
Wal-Mart store in Secaucus, New Jersey / Jin Lee/Bloomberg via Getty ImagesWal-Mart's (WMT) struggles, as seen in its latest quarterly report, are obviously not good news for shareholders of the world's largest retailer, but they might not be bad news for the country as a whole. That's because many of Wal-Mart's rivals are doing just fine.

When the U.S. economy started to tank, the Bentonville, Ark., company's low prices attracted cash-strapped consumers. But now, as the economy continues to rebound, consumers may be less worried about prices and more attuned to other aspects of their shopping experience such as customer service, which has never been a forte of Wal-Mart.

According to Wal-Mart, many people continue to struggle because of the rise in the payroll tax and delays in getting tax refunds from the IRS.

Wal-Mart's gloomy outlook confirms the sentiment echoed in internal memos recently leaked to Bloomberg News about the chain's poor performance in February. The company's forecast for first-quarter earnings was below Wall Street expectations, but the shares are trading up so far today. Raising its dividend by 18%, to $1.88 annually, is offsetting some worries about Wal-Mart's gloomy forecast.

Wal-Mart expects comparable sales to be flat in the current quarter as uncertainty about the economy continues to weigh on it. The Associated Press reported today that the number of Americans seeking unemployment benefits rose in the most recent week. Consumer confidence also declined in January.

These macroeconomic forces affect all retailers, but many are doing better than Wal-Mart.

Its chief rival Target (TGT) recently reported a better-than-expected 3.1% gain in January sales in stores opened at last a year. Comparable sales at TJX (TJX) rose 3% during the same time, exceeding the expectations of the parent company of TJ Maxx, Marshall's and Home Goods. Macy's (M), an up-market department store chain, recently reported that January same-store sales rose a better-than-expected 11.7%. (Wal-Mart doesn't report monthly sales.)

If Wal-Mart continues to struggle, investors may find it hard to believe that the fault lies entirely with penny-pinching consumers.

Jonathan Berr is long Target. Follow him on Twitter @jdberr.

Feb 22, 2013 2:47PM
No ammo or guns, is the reason.No product= no sales.
Feb 22, 2013 2:46PM
Couldn't happen to a better company. Crash and burn Walmart, you freebie, ObamaNation loving pricks!
Feb 22, 2013 2:29PM
Why are we so down on Wal-Mart? If you think for one second that all retailers arent buying cheap crap from China and screwing their employees out of as much as they can.....you are kidding yourself. This is the new American way. This is why our country is in the S***hole. We are run by Greedy corperations that only care about 1 thins. The all mighty $.
Feb 22, 2013 2:22PM
less choice in walmart. empty shelves, only smaller size name brand, higher price merchandise on shelves,to get people to buy up the less desirable choice. higher prices and smaller packaging. Walmart is no longer the go to store for lower priced merchandise. I started shopping the ads from Fred Meyer, Safeway and Albertsons and can get a lot of products cheaper, including Dollar tree and Big Lots and Grocery Outlet. With all these other choices, Walmart needs to get its act together if  it wants to get back into the winners circle. I never buy meat at walmart, too expensive, same with cheese, watching the ads, I can always find cheese cheaper than walmart. Produce is hit and miss, sometimes walmart has the best deals but other times it is higher, a kind of look and see proposition. I do less and less shopping at walmart every year as they are just becoming a middle of the road store, no real reason to go out of my way to shop there. I am retired disabled with a fixed income so I must make every penny count and walmart is no longer viable in that category!!!
Feb 22, 2013 2:18PM
People are always putting Wal-mart down.  Lets take people that  criticizes Walmart how many people do  you see going in the exit and coming out of the enter doors?  They get something and don't put it back where it goes instead puts it anywhere so they won't have to walk a few yards.  How about the carts left cause they are too lazy to put them in the return carts here slot.  I shop at wal-mart and love saving money if you don't want to shop there then don't !! pay more for you grocers bet if you compare prices with your store & walmart you are paying alot more for the same thing.  Glad you people don't shop at walmart with your attitude I don't have to put up with you.  Also they price match coupons from other stores bet your store don't. 
Feb 22, 2013 2:17PM
Who are you people?  I have been working for 40 years and retail has always been a low paying job.  It usually employed moms who wanted something to do and high school and college kids.  It's a job not a career.  If you want to make money become a lawyer and not a cashier.   Most retail stores pay about the same.  Why pick on Walmart?  And their employees (of which I am one) shouldn't blame Walmart  for the fact that they didn't do something better with their lives. 
Feb 22, 2013 2:17PM
Dear friends of America-

You are a recipient of your own wants and needs, the majority of you have been actively looking or hunting for bargains all your life. Its the American way. Now, after 50 years of having a great time at Wally World, the game has changed. But only for yourselves. See, you could have been buying American all this time. Sure, a bit more expensive, but the quality is there. Now, you have mortgaged your future for that temporary good feeling of satisfaction.

Today. all the U.S. manufacturing jobs are exported out because the Corps noticed your hunger for cheaper things, and you did not mind buying them over and over again. Don't get me wrong, China, Mexico and Asia are also whoring their people out too by giving big US manufacturing firms tax breaks bringing in low paying jobs and subsidizing the export products (currency wars), thus keeping their citizens a in a state of  perpetual poverty as well. The Corps and the Governments are sucking the life out of everyone of you that chases the dream of a brilliant savings. 
You are now living on a consumer plantation.

If your not watching yet, keep tuned to see the Corporations  and Governments fist **** each other for the last penny in your hungry, cold hands. Say good night Gracie.....

Feb 22, 2013 2:16PM
Shopping at walmart is very unamerican you may as well just send your money China and be done with it.
Feb 22, 2013 2:08PM

I was fired from Walmart after working for them for 3 years and although I am upset over that still

it does not stop me from shopping there. I still concider them to have the best bargains and lowest prices of all the other retailers. I do think that they could raise the wages of the employees and give them at least 40 hours a week. But if we stop shopping there because of the way they treat their employees the only ones that suffer are those employees because that is what causes their hours and wages to be low in the first place. Please concider the options of the good people that work there. There are many good employees there that work very hard to make the customers happy.

Do not judge them by the few bad ones!!

Feb 22, 2013 2:07PM
What is your problem with china? They are the ones funding our country right now. Over 46 cents of every dollar Obama spends comes from China. His whole agenda is to turn this country from a capitalistic,go get a job,work for your pay society into a nanny communist state where the government will give you a welfare check,food stamps,and government subsidized housing. Now all you have to do is sit on your fat **** and watch Oprah. The,leech of the gov't majority,put this bozo in office so you better start liking the Chinese-they own us and we are their vassal state already
Feb 22, 2013 2:02PM
All companies polish the books to look good /or bad which ever benefits them for what ever purpose! mainly hiding money from taxation or from giving anyone a pay raise. Try to find anything in walmart for adults or seniors unless you wear kids sizes and teeny boppers styles, They will not listen when you tell them "get something adults wear" , Adults have the money not the kids so pay attention walmart-target and ALL you out there, If you want success try giving EVERYBODY what they want & need!!! not what they can buy CHEAP from CHINA. I would like to see MORE AMERICAN MADE products and less china who is the ENEMY of the WORLD, NOT the people the form of government. I'm sure I'm not the only person wanting more american made and less china made in the stores that's ALL store not just walmart.
Feb 22, 2013 2:02PM
I have worked for five multi national corporations and several other large american companies. I was an assistant store manager for wal*mart for seven years in the 90's.  I'm not going to go into all the details, but I can tell you working for them at that time was a living hell.  While they cut hours daily on the hourly associates they didn't care if I worked 16+ hours a day because I was salaried. It was nothing more than glorified slavery.  I was to be there at 7am and leave whenever everything was done and nothing was ever done. They paid me just enough to keep my family afloat and as I loved my family I sacrificed. All three of my children went through high school while I worked there and I can only remember a handful of their events I was able to go to. I was called in on my day off. told to come back from vacations. Called and stressed out on almost every day off. I use to pray that a truck would cross the center lane and hit my car while on the way to work. I realize it sounds like I'm whining, but I am only trying to give a true assessment of what it's like to work there.  After I had my third heart attack I finally said enough is enough.  Wal*Mart sucks in everyway possible. 
Feb 22, 2013 1:57PM
Hey TrojanFan, I do give a **** about where I spend my money and if I will shop around before having to buy anything from walmart. I used to buy 90%+ of my things at walmart and now I buy 20% or less there now because of many of the reasons posted here, yes there are many post that aren't truthful or sincere, but mine and many others are .... so in your language **** OFF!!
Feb 22, 2013 1:53PM

I'm not a big fan of Wal-Mart, but there are those on the night shift who've worked there for years that make good wages and have good benefits.  Key Word.......NIGHT SHIFT.  There are not too many businesses who really care about their workers.  If they could replace you with a machine....they would.  Things are getting bad everywhere. So, if you have a choice...then decide what you really want or continue to be a sucker.


As for the economy rebounding......the economy has never really rebounded since 1970s, if it has, it was only at the expense of a large growing deficit thanks to all those corrupt businesses, politicians, banks, insurance companies, ponzi schemers, realtors, financial advisors, high ranking government employees, welfare scum etc...


It's all crap...you just have to use your brain and learn how to swim through it.

Feb 22, 2013 1:51PM
The more they raise fuel prices the more we have to pinch penney's!
Feb 22, 2013 1:45PM
Only been to Walmart once . . . . . . . that was enough

The name of their company should be ChinaMart.  This company is destroying America! I hope they continue to fail, I wouldn’t step foot in one of their stores.

Feb 22, 2013 1:41PM

I shop where I can find the cheapest prices...I give a mad **** about their employees just like you do not give a **** about where I work...All you people acting like you will pay a higher price for your items are a bunch of lying fools so stop with your stupid **** crusades you think you are on....if I was wrong do you think there would be a Wal-Mart in every city in America?. Like it or not they are probably the most successful retail business in the world because they pass value to their customers....I lost a union grocery job when WallMart came into my town....I went to college and got my skills up where i can demand a higher wage, not like the fools i worked with who sat on their **** or had a family they could not afford so they had to work and could not go to college to build their skills up....Oh and my sister probably saved over $100.00 a month shopping at WallMart.....Here is a novel idea...you do not like where u work...THEN QUIT!! i do not see Wall Mart MAKING ANYONE work there and have any of you ****s thought about how much $$ WallMart is saving their customers?? Leaving that family with more $$ in their pockets?? Stupid Americans fighting outsourcing and cheap labor...we should embrace this and replace these low-skilled jobs with skilled labor here in the country...instead we sitting here trying to fight it and our Govt has failed to educate the people to obtian and create the newly needed high skilled labor jobs in our country...

Feb 22, 2013 1:38PM
Its all about customer service and Wal-Mart management has ignored that. Treating their employees fairly and giving them a decent wage would help improve their attitude which presently leaves a lot to be disired. Upper management needs to get out of their offices and walk the floor. All Wal-Mart employees from top to bottom should attend diversity training and learn how to speak to the customers and each other.
Feb 22, 2013 1:33PM
It's not the economy.  It's Wal-mart.  They are evil.  They are anti-American.  Sure greed is as American as you get, but their greed is exceptional and is ruining this country.  Shop elsewhere or you will have no where else to shop. 
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?


[BRIEFING.COM] The stock market finished an upbeat week on a mixed note. The S&P 500 shed less than a point, ending the week higher by 1.3%, while the Dow Jones Industrial Average (+0.1%) cemented a 1.7% advance for the week. High-beta names underperformed, which weighed on the Nasdaq Composite (-0.3%) and the Russell 2000 (-1.3%).

Equity indices displayed strength in the early going with the S&P 500 tagging the 2,019 level during the opening 30 minutes of the action. However, ... More