This is MAJOR news. When Wal-Mart shows losses during a holiday quarter, we are in real trouble.
By Jonathan Birchall in New York
Published: February 19 2010 02:00 | Last updated: February 19 2010 02:00
During the important holiday quarter ending on January 31, net sales at Walmart’s 3,400 plus US stores fell 0.5 per cent year-on-year to $71bn, while comparable store sales declined 2 per cent. Customer traffic also fell.
The retailer blamed price deflation in food and electronics for lowering the overall value of its sales, as well as the impact of store refurbishment.
The decline contrasted with the strong sales and traffic growth during its first three quarters, as low prices attracted new budget-minded shoppers.
Tom Schoewe, chief financial officer, argued that the declines did not mean Walmart was losing some of the customers it had gained during the recession, saying the “modest decline” in traffic was “not in our mind an indication of trend”.
He highlighted the cautious mood of Walmart’s largely low-income shoppers, saying there was still a high level of anxiety over unemployment.
In contrast, retailers such as Whole Foods Market, the upmarket grocer, and Starbucksreported evidence of increased readiness to spend during the fourth quarter, suggesting that different consumer segments are responding differently in the early stages of recovery.