Thursday, June 07, 2007

Global Sales Increases for Wal-Mart Help the U.S.

From today's WSJ, "Retailers reported modest sales increases for May, rebounding from a dismal April but confirming a broad consumer slowdown that's now stoking worries about the crucial fall and holiday seasons.

Wal-Mart reported a 1.1% same-store sales gain, at the lower end of its 1% to 2% forecast (see chart above). While results were better than expected at the company's Sam's Clubs, same-store sales at its namesake chain rose just 0.3% amid persistent weakness in apparel and home-related items."

From the report "Globalization and Employment by U.S. Multinationals: A Framework and Facts," by Matthew Slaughter, economist at Dartmouth:

"Wal-Mart supports its international operations at its headquarters in Bentonville, Arkansas, where it employs over 15,000 people. Roughly 1,500 associates in its information systems division are responsible for coordinating the worldwide distribution systems that move Wal-Mart’s products to ten countries around the globe. Before Wal-Mart began to expand overseas in the mid-1990s, most of these 1,500 jobs did not exist."

Bottom Line: Despite somewhat weak same-store sales for Wal-Mart, notice that Net Sales for all Wal-Mart Stores increased by 5.5% in May (see chart above), and note also that international sales for Wal-Mart increased 14.2% in May and 16.4% over the last 17 weeks.

This points another way that globalization helps the American economy - even if U.S. sales are slow, companies like Wal-Mart might be experiencing strong sales overseas, which helps support and expand the 15000 Wal-Mart jobs in Arkansas coordinating an expanding worldwide distribution system to support double-digit sales increases OUTSIDE the U.S.


At 6/08/2007 7:39 AM, Blogger juandos said...

"Today there is a rising outcry in the United States against the global engagement of its multinational firms. Gloom and doom forecasts abound of the dire impact foreign expansion will have on the U.S. economy"...

Hmmm, so maybe just maybe if the US wants to stay competitive some of the inane socialist baggage put on American business (thereby increasing the cost of the product or service) by the pandering politicos will have to be removed...

Speaking of pandering politicos remember Halliburton ...


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