Wal-Mart's biggest problem: Its customers

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John Q. Public
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Wal-Mart's biggest problem: Its customers

Postby John Q. Public » Tue May 20, 2014 6:41 am

Its prices continue to undercut competitors. It's offering a slew of new initiatives, from in-store money-transferring services to organic groceries—even comparison shopping for auto insurance.

But despite these strategies—and a broad consumer base driven by low prices—Wal-Mart's U.S. stores are still struggling to gain traction, having posted their fifth-straight quarter of negative same-store sales last week.

At the center of the discounter's domestic woes is its appeal among shoppers who are facing stagnant wage growth and simply can't afford to spend on discretionary items—or in some cases, food.


Although weather played a role in many retailers' earnings for the first quarter, cold temperatures can't be blamed for more than a year of sluggishness in domestic sales, analysts said. Among Wal-Mart's woes is its grocery business—where the company says sales were trimmed by 0.9 percent because of last year's changes to food stamp benefits.

With food accounting for more than half of the retailer's business, it's a big blow.


Cuts to food stamps and unemployment have have had a major effect on stores selling groceries, but I have to scratch my head at the idea of Walmart, one of the biggest forces driving wages down complaining about its customers not having any money to spend. Sounds like the vicious circle might be turning into a vicious spiral.

Don't look at me, I just work here.

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Re: Wal-Mart's biggest problem: Its customers

Postby Fordama » Tue May 20, 2014 10:37 am

Indeed, their biggest problem...

This country of the United States was not built by those who waited and rested and wished to look behind them.---JFK

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