Rising gas prices take toll on Wal-Mart

Studies show that retailers favored by lower-income households will get squeezed more by high gas prices and continued unemployment.

By Kim Peterson Mar 14, 2011 3:57PM
Image: Buying gas (© moodboard/Corbis/Corbis)Which retailers get hurt the most by rising gas prices? Wal-Mart (WMT), J.C. Penney, Kohl's (KSS) and Kroger (KR), according to one analyst.

And which retailers aren't as vulnerable to changes at the pump? Costco (COST), Macy's (M) and BJ's Wholesale Club (BJ).

The reason is because poorer families in America are hurt more by gas price hikes and high unemployment levels, Bloomberg reports. And poorer families prefer to shop at Wal-Mart, one analyst says.

The analyst, Richard Hastings of Global Hunter Securities, studied the income levels of shoppers and found that 82% of Wal-Mart shoppers make less than $75,000 a year. That compares with 63% of BJ's shoppers and 55% of Costco members that make less than $75,000 a year.

Post continues after video:
About 8% of Wal-Mart shoppers earn more than $100,000 a year, compared with 28% at Costco and 25% at BJ's.

Higher gas prices will put the squeeze on some families. And for some, that will directly translate into fewer clothing purchases. That could be a problem at Kohl's, where 29% of shoppers said that if gas prices go up, their clothes budget goes down, Bloomberg reports.

"If you’re living paycheck to paycheck or you’re on a fixed income, the rise of gas prices impacts your habits," a AAA spokesman told Bloomberg. "If you’re more affluent and can afford gasoline at any price, then you’re going to drive regardless."

Today's average gas price is $3.56 for regular gas, according to AAA's Fuel Gauge Report. A month ago, the average price for regular was $3.13, and a year ago the average price was $2.79.

Gas prices aren't the only thing on the rise. Economists think the prices of all goods and services will rise 2.3% this year, Bloomberg reports. But wages aren't matching that increase. Average hourly earnings only rose at a 1.9% annual rate in January.
12Comments
Mar 15, 2011 8:08AM
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It is not just gas prices hurting walmart...they have hurt themselves. You can find prices better or the same and not have to deal with the POOR customer service at walmart. I agree with other posters here....there is very little at walmart from the USA mostly China and Mexico in the produce section. The longer Sam Walton has been dead the further from what he wanted walmart to be they get....his kids have destroyed his vision all in the name of greed for themselves.
Mar 14, 2011 8:49PM
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83% of Wal-Mart's Suppliers are in the People's Republic of China. Hey Wal-Mart, why don't you try to get things made here in the USA that way it will save on transportation costs. Just a thought Bentonville, Arkansas.
Mar 14, 2011 7:47PM
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THERE ARE WAY MORE PEOPLE IN THIS COUNTRY THAT MAKE UNDER 100,000 AND LESS THAN 75,000 BUT THEY STILL OUTNUMBER THE FILTHY RICH SLOBS WHO ARE SCREWING THEM AND IF IT COMES DOWN TO IT AND IT COMES TO PUSH AND SHOVE I WOULD TAKE THE LOWER PAID PEOPLE OVER THE RICH WHEN IT COMES TO A FIGHT 
Mar 15, 2011 11:38AM
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The reason gas is so high is that in 2008 the oil speculators who

got in the game late lost their ****. Now they are recouping their

losses.  Economics: 101 Screw the little guy as long and hard as

possible.

Mar 15, 2011 12:40PM
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It's about time Wal-Mart takes a hit, how many mom and pop stores is Wal-Mart responsible for putting out of business. How much crap from China does Wal-Mart Import. How many people does Wal-Mart employ with no benefits, how much crappy service does Wal-Mart offer it's customers???????
Mar 15, 2011 12:26PM
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The posts are interesting; however, I did a survey of shelf items in local chain, retail and outlet stores and with few exceptions most, not only Walmart,  have a great percentage of goods made in China or other Asian countries. If you have a vendetta with W/M, that's your problem, but I suggest you check the shelves at Target, Kohl's and Penney's.  Look at the major brand labels and then find the place of manufacture. Very  Interesting.
  
Mar 15, 2011 6:05AM
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Kroger and all these food stores are the same as Walmart. All those BBQ grills and tables you see on their sidewalks are from China. Want to see more then wait till Christmas.I worked for Kroger for 5 years and they get tons of toys and stuff in from China and Vietnam.I unloaded trucks with pallets full so I know for fact. I don't see anyone gripping about them....
Apr 26, 2011 12:18PM
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Number one I don't drive a damn import car. I saw this mess coming back in the 70s when people fell for the big selling campaigns put on by the Japanese to sell their little tin cars they were making at that time. My dad drove a chrysler with a V8 that got 22mpg on the road and my buddy drove a datsun that only got 24 with a tailwind. So the auto manufacturing jobs started going overseas and that was just the tip of the iceberg. Now gas is on the rise again and working in a drive in won't pay the bills. Those are the kinds of jobs the Obama administration is bragging about. You can't flip hamburgers and live like you did when working for GM. Of course the government won't tell you this because if you work for the government you live out of our pockets anyway and don't really care. Now inflation is rearing it's ugly head again to finish off  what's left the near worthless dollar, if it's still worth five cents I would be surprised. Unless we bring jobs back to America it's all over and the so called government experts can go jump in the ditch.

Mar 14, 2011 8:54PM
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Don't buy China products at wal-mart. You can buy China products online and not pay the middle person.

Yes wages are falling as Union membership declines. Check the charts for yourself.

Right to work for less.

Apr 30, 2011 4:24PM
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I agree with walmart making and selling products from the USA, but that also means products will cost a lot more money, and without jobs to pay for it we will continue to see everything come in from China.  I have worked for walmart, the pay is a lot cheaper than home depot, costco, ****'s, and they harrass you about taking too long on anything from going on break, to stocking a shelf, I even got in trouble for taking too long in the bathroom.  If they go under, it would just be the cherry on the cake.  Go see capitolism a love story, it puts all this into persepctive.
Mar 15, 2011 3:56AM
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Oh forgot to tell ya I get 37 MPG from a 1997 Mercury Grand  lol what is three miles extra, not a prob. 
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