Tag Archives: Walmart

Walmart giveth, and Walmart taketh away…

Walmart just made two announcements that perfectly illustrate the dilemma facing the developed world.

First, the omnipresent retailer raised its minimum wage to a respectable-sounding $11/hour:

(WGNO) – Walmart is raising its minimum wage and handing out tax cut bonuses because of the new Republican tax law.The retail company said the wage hike to $11 an hour would roll out in February. Employees are also getting a one-time bonus of up to $1,000.

Walmart previously raised its minimum pay for most employees to $10 an hour in 2015. As of December, the average pay for full-time workers was $13 an hour.

“Today, we are building on investments we’ve been making in associates, in their wages and skills development,” Walmart president and CEO Doug McMillon said in a news release. “It’s our people who make the difference and we appreciate how they work hard to make every day easier for busy families.”

He added that “tax reform gives us the opportunity to be more competitive globally and to accelerate plans for the U.S.”
The bonus amount will be based on length of service, according to the company. Workers who’ve been there for at least 20 years will get the full $1,000.

Because of the tax reform law, Walmart says it’s also creating a new benefit to assist associates with adoption expenses. The benefit, which will be available to full-time hourly and salaried workers, will total $5,000 per child.

The company, which is the nation’s largest private-sector employer, said it’s also expanding its parental and maternity leave policy. Full-time hourly workers in the United States will get 10 weeks of paid maternity leave and six weeks of paid parental leave.

The changes affect more than one million hourly associates.

“Thanks to the passage of historic tax cuts, American workers and their families are winning!” tweeted Ivanka Trump, the White House senior adviser and daughter of President Trump.

McMillon also said the company is “early in the stages of assessing the opportunities” that tax reform creates for Walmart. The company said it will share further details when it releases quarterly results next month.

But then it announced the closing of a bunch of Sam’s Club warehouse stores, resulting in thousands of layoffs:

(UPI) – Walmart announced Thursday it is closing 63 Sam’s Club stores across the United States, leaving workers at the membership club without jobs.

Ten locations for the warehouse club spinoff of Walmart closed immediately and will become e-commerce distribution centers, according to Business Insider, which listed store closings it knows about. The remaining places will remain open for a few weeks.

“After a thorough review of our existing portfolio, we’ve decided to close a series of clubs and better align our locations with our strategy,” Sam’s Club posted on Twitter. “Closing clubs is never easy and we’re committed to working with impacted members and associates through this transition.”

Employees in some cases were informed of the closings while arriving to work Thursday, KHOU-TV in Houston and KENS-TV in San Antonio reported.

“Club is closed today so we could inform our associates so we gave them the day off and closed the club. We will reopen the club tomorrow,” Anne Hatfield, director of communications for Walmart’s public affairs, said in a statement to KENS.

At one Sam’s Club in San Antonio, employees told KENS the store will close for good on Jan. 26. On Friday, it will offer 25 percent off on everything except for alcohol, tobacco, batteries and tires.

Sam’s Club, which has 100,000 associates, operates more than 650 membership warehouse clubs in the United States, according to its website. The first Sam’s Club, founded by Sam Walton, opened on April 7, 1983, in Midwest, Okla.

There are two problems here: First, rising wages increase the “wage inflation” measure that the Federal Reserve watches to decide whether inflation is becoming a problem and needs to be smacked down with higher interest rates. (See Walmart wage hike may show wage pressures building for lowest paid. )  The eventual result of rising interest rates in the late stages of an expansion is a recession in which millions of people are thrown out of work, thus canceling the minimum wage boost.

The second, much bigger problem is that next-gen automation becomes more attractive when wages rise. Walmart converting Sam’s Clubs to regional e-commerce distribution centers is, in effect, replacing store clerks with warehouse robots and a relative handful of website designers. To the extent that wages rise, so do automation-related layoffs, once again cancelling out those higher paychecks.

Automation has of course been around since the start of the industrial revolution, but this latest phase is vastly more pervasive and powerful than anything that’s come before.

The result: Life gets better for those who own the robots and harder for those the robots replace. And government encourages the 99% to borrow to make up the difference…until that trend also hits the wall.

 

[From an article published by DOLLAR COLLAPSE .com]

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

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Wal-Mart’s first-ever sales drop marks the end of an era…

Crowded Wal-Mart store

Not every milestone is worth celebrating.

For the first time ever — or at least since the company went public some 45 years ago — Wal-Mart’s revenues shrank from the year before, according to its annual financial filing released Wednesday.

Wal-Mart is clearly having trouble adapting its gigantic stores to the Internet age. To be sure, it is a retail juggernaut that brings in half a trillion dollars (yes, that’s right, trillion) in sales every year. And with more than 11,500 stores in 28 countries, there’s no way it will disappear anytime soon.

Still, Wal-Mart might have just hit its growth limit.

And the sales dip comes despite the fact that Wal-Mart spent $11.5 billion (roughly matching what J.C. Penney made in sales last year) to build more than 400 new stores, remodel old locations, and revamp its website and other technology to better serve its customers.

Though Wal-Mart shares were a safe haven in the rocky start of 2016, investors are pricing in more weakness. The stock has fallen behind retail competitors and the broader market.

In February, Wal-Mart lowered its annual net sales growth forecast to “relatively flat,” from earlier guidance that called for an increase of as much as 4 percent (the company has pointed out that previous guidance didn’t account for currency changes, which have stung the global retailer).

Wednesday’s filing attributes part of the 2015 sales drop to currency impacts and a decrease in fuel sales due to lower gas prices. Sales have also suffered from ongoing store closures, including the shuttering of its entire fleet of smaller, “Express” stores.

But Wal-Mart also acknowledged it has shifted the way it runs the company, dropping a long-time focus on growing net sales and cutting operating expenses as a percentage of sales. Its aim now is on making “strategic investments” to support the “long-term health of the company.” While that’s happening, Wal-Mart warned, it may not be able to deliver the kind of steady net sales and profit growth investors have grown accustomed to seeing. (Though it notes it will continue to build new stores and e-commerce capabilities and grow sales at established stores.)

While jarring, these changes aren’t necessarily bad. Wal-Mart remains a massive retail force, and investors shouldn’t discount the muscle behind any decision it makes. This can already be seen in its fast-growing mobile app and its rapidly expanding and seemingly successful grocery pick-up program, which lets shoppers order groceries online and then swing through a Wal-Mart drive-through to pick them up.

It’s also pretty amazing that executives are finally willing to take poor results on the chin and veer away from precedent in order to morph the company from a mostly brick-and-mortar operation into one that serves customers the way they want to shop — whether in stores, the web, on mobile, or a mix of all three. And if these investments work, they could position the company for another half-century of retail dominance.

But what Wal-Mart doesn’t have is an unlimited amount of time. Reporting declining sales might be okay for a year or two, but at some point a turnaround plan could become a failed strategy. Its first revenue decline should serve as a wake-up call.

 

[This article appeared in The Chicago Tribune]

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

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White House vs. Reality: Obama says US economy is doing well again, while major retail chains keep closing stores

Stores closing all over USAObama recently stated that anyone claiming that America’s economy is in decline is “peddling fiction“.  Well, if the economy is in such great shape, why are major retailers shutting down hundreds of stores all over the country?  Last month, I wrote about the “retail apocalypse” that is sweeping the nation, but since then it has gotten even worse.  Closing stores has become the “hot new trend” in the retail world, and “space available” signs are going up in mall windows all over the United States.  Barack Obama can continue huffing and puffing all he wants about how well the middle class is doing, but the truth is the cold, hard numbers that retailers are reporting tell an entirely different story.

Earlier today, Sears Chairman Eddie Lampert released a letter to shareholders that was filled with all kinds of bad news.  In this letter, he blamed the horrible results that Sears has been experiencing lately on “tectonic shifts” in consumer spending

In a letter to shareholders on Thursday, Lampert said the impact of “tectonic shifts” in consumer spending has spread more broadly in the last year to retailers “that had previously proven to be relatively immune to such shifts.”

“Walmart, Nordstrom, Macy’s, Staples, Whole Foods and many others have felt the impact of disruptive changes from online competition and new business models,” Lampert wrote.

And it is very true – Sears is doing horribly, but they are far from alone.  The following are 13 major retailers that are closing down stores…

#1 Sears lost 580 million dollars in the fourth quarter of 2015 alone, and they are scheduled to close at least 50 more “unprofitable stores” by the end of this year.

#2 It is being reported that Sports Authority will file for bankruptcy in March.  Some news reports have indicated that around 200 stores may close, but at this point it is not known how many of their 450 stores will be able to stay open.

#3 For decades, Kohl’s has been growing aggressively, but now it plans to shutter 18 stores in 2016.

#4 Target has just finished closing 13 stores in the United States.

#5 Best Buy closed 30 stores last year, and it says that more store closings are likely in the months to come.

#6 Office Depot plans to close a total of 400 stores by the end of 2016.

The next seven examples come from one of my previous articles

#7 Wal-Mart is closing 269 stores, including 154 inside the United States.

#8 K-Mart is closing down more than two dozen stores over the next several months.

#9 J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

#10 Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

#11 The Gap is in the process of closing 175 stores in North America.

#12 Aeropostale is in the process of closing 84 stores all across America.

#13 Finish Line has announced that 150 stores will be shutting down over the next few years.

These store closings can be particularly cruel for small towns.  Just consider the impact that Wal-Mart has had on the little town of Oriental, North Carolina

The Town’n Country grocery in Oriental, North Carolina, a local fixture for 44 years, closed its doors in October after a Wal-Mart store opened for business. Now, three months later — and less than two years after Wal-Mart arrived — the retail giant is pulling up stakes, leaving the community with no grocery store and no pharmacy.

Though mom-and-pop stores have steadily disappeared across the American landscape over the past three decades as the mega chain methodically expanded, there was at least always a Wal-Mart left behind to replace them. Now the Wal-Marts are disappearing, too.

Of course there are many factors involved in this ongoing retail apocalypse.  Competition from online retailers is becoming more intense, and consumer spending patterns are rapidly changing.

But in the end, the truth is that you can’t get blood out of a rock.  The middle class in America is shrinking, and there just isn’t as much discretionary spending going on as there used to be.

And now that we have entered a new economic downturn, many retailers are finding that there are some local communities that can no longer support their stores.  The following comes from CNBC

Though the shift to online shopping is no doubt playing a role in lighter foot traffic at malls, there’s more to their changing economics than the rise of Amazon. Changing demographics in a town are another reason a shopping center could struggle or fail — for example, if massive layoffs in a particular industry cause people to move away to find employment.

“A lot of people want to try and tie it to the Internet or ‘that’s not cool,’ or teens don’t like it,” Jesse Tron, a spokesman for industry trade group International Council of Shopping Centers, told CNBC last year. “It’s hard to support large-format retail in those suburban areas when people are trying to just pay their mortgage.”

In order to have a thriving middle class, we need good paying middle class jobs.  Unfortunately, our economy has been bleeding those kinds of jobs quite rapidly.  For example, Halliburton just announced that it is eliminating 5,000 more jobs after getting rid of 4,000 workers at the end of last year.

During the Obama years, good paying middle class jobs have been getting replaced by low paying service jobs.  At this point, 51 percent of all American workers make less than $30,000 a year.

And there is no way that you can support a middle class family with children on $30,000 a year.

We have an economy that is in the process of failing.  We can see it in the explosion of subprime auto loans that are going bad, we can see it in the hundreds of retail stores that are shutting down, and we can see it in the tens of thousands of good paying energy jobs that are being lost.

During the Obama years, interest rates have been pushed to the floor, the Federal Reserve has created trillions of dollars out of thin air, and the size of our national debt is getting close to doubling.  Despite all of those desperate measures, our economy continues to crumble.

We stole from the future to try to paper over our failures and it didn’t work.  Now an economic downturn that will ultimately turn out to be even worse than the “Great Recession” of 2008 and 2009 has begun, and our leaders have absolutely no idea how to fix things.

 

[by Michael Snyder, writing for The Economic Collapse Blog]

 

NORM ‘n’ AL Note:  “Our leaders have absolutely no idea how to fix things.”  That has been the story of the Obama administration since Obama first set his sights on the White House.  If we ask ourselves, “Is the USA better off now than when he first took office?” the answer can only be NO.  Not only does he spend our money like it’s his money, he has managed to almost double our national debt all by himself, make our country the laughing stock of many nations and the target of others, and divide Americans like never before with his liberal policies and “we’re going to do it my way” executive actions.  Just in case you may still be thinking Obama cares about you and the rest of America, he doesn’t.  He cares only about himself.  He will leave the White House with the most dismal record of any president in history, and he still believes he’s always right.

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

 

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