We may not officially be in a recession any more, but the poor are still hurting pretty badly. And that’s Walmart’s core customer base:
Wal-Mart Stores Inc forecast a lower full-year profit than analysts expect, as fewer food stamps, higher taxes and tighter credit erode its sales, news that sent its shares down 1 percent in premarket trading on Thursday.
….A major factor in Wal-Mart’s U.S. performance was a “low-single-digit decline” in sales of groceries at stores open at least a year, which generate about half of its sales….Wal-Mart’s grocery sales have suffered from fewer food-stamp benefits resulting from U.S. federal budget cuts in November. One in five of its shoppers relies on food stamps, according to Cowen analyst Tal Lev.
I imagine that Walmart is now suffering from the failure to extend unemployment benefits too. And from the slowdown in economic activity and job losses caused by the sequester. And from our failure to increase the minimum wage.
But then again, lots of people are suffering from all that. Walmart is just a very large canary in the coal mine.
