Thursday, November 13, 2008

No Recession At Wal-Mart

WSJ: Wal-Mart, the nation's largest private employer, is reaping big gains from the souring economy even as consumers cut back, retail chains struggle and thousands lose their jobs.

On Thursday, after a week of bad news from retailers such as Best Buy and Starbucks, Wal-Mart said earnings for the third quarter rose 9.8% while sales rose 7.5% (see chart above). At stores open at least a year, sales rose 3%, twice as much as a year before, and far better than nearly every other U.S. retailer.

Behind the figures is a confluence of trends fueled by the downturn. As strapped consumers look for cheaper goods, and weaker retailers go out of business, Wal-Mart is using its unmatched economies of scale to drive down prices, undercut competitors and squeeze costs out of suppliers ever more dependent on the Bentonville, Ark., behemoth.

Indeed, the downturn is increasing Wal-Mart's clout just as its dominance was being threatened by diminishing returns on its big-box expansion formula, more-selective consumers and a growing field of rivals.


At 11/14/2008 12:13 AM, Anonymous Anonymous said...

I think it is because WalMart targets the lower-end market. WalMart's sales volume surges because of the economy going south.


At 11/14/2008 1:08 AM, Anonymous Anonymous said...


bear and beans vs. champaign and caviar


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