Walmart’s shares fell 2.2% and closed at $69.30 per share on February 18th, amidst much hand-wringing in the corporate offices and on Wall Street. Although a 2.2% may not seem like such a big deal — Walmart’s shares are still up $10.54 from this time last year — they’ve still come down from their high of $76.91 last October. Cameron Geiger, Walmart’s Senior Vice President of Walmart U.S. Replenishment, blames this year’s expiration of the 2% payroll tax cut and delayed tax refunds. Glenn J. Kalnoski reports in MoneyNews that the IRS is running $26 billion behind in processing refunds, thanks to the prolonged fiscal cliff negotiations.
Of course, it doesn’t occur to Walmart and Wall Street’s top dogs that the GOP is directly to blame for these developments causing consumers’ additional economic woes: Republicans are the ones who forced the payroll tax hike and held up the fiscal cliff deal, and hence the IRS’ ability to process tax returns and refunds. In this latest casualty in the economic collision course between Walmart’s celebrated low wages/low prices business model and the GOP’s supply side economic policies, consumers can no longer even afford to buy cheap Chinese slave labor crap at Walmart’s deeply discounted prices. Oh, and 32 straight days of higher gas prices — as reported by Emily Jane Fox on CNN Money — certainly isn’t helping.
But wait … there’s more bad news from purveyors of “the dismal science.” Kalinoski reports that Michael Englund — an economist from Action Economics — forecasts “zero consumer spending growth during the first quarter as a result of these factors [U.S. government budget cuts, rising gas prices, tax hikes, and delayed refunds].” And in case you’re about to cry “liberal bias,” Action Economics provides award-winning commentary to stock traders … not left-wing journalists. Jay Franco. an economist from the Conference Board adds that “It may take a while for confidence to rebound and consumers to recover from their initial paycheck shock.” He projects that in 2013, a worker making $50,000 per year will experience a $1,000 drop in yearly take-home pay.
Lindsey Janis reports on ABC News:
“Walmart shoppers, they are considered a real important barometer for the health of the U.S. economy, and these emails have already sparked concern on Wall Street about the strength of the recovery.”
Renee Dudley from Bloomberg obtained emails from top Walmart executives. On February 1st, Geiger lamented:
“Have you ever had one of those weeks where your best- prepared plans weren’t good enough to accomplish everything you set out to do? Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”
And on February 12th Walmart’s Vice President of Finance and Logistics Jerry Murray warned his fellow executives:
“In case you haven’t seen a sales report these days, February MTD [month-to-date] sales are a total disaster … The worst start to a month I have seen in my 7 years with the company.”
Here’s the video from ABC News:
|Elisabeth Parker is a writer, Web designer, mom, political junkie, and dilettante. Come visit her at ElisabethParker.Com, “like” her on facebook, “friend” her on facebook, follow her on Twitter, or check out her Pinterest boards. For more Addicting Info articles by Elisabeth, click here.|