Wal-Mart (NYSE:WMT) claims that US consumer is under buying so they are under-performing. You see it’s the IRS’s fault. Tax returns are not as big as expected so the consumer is not spending.
Really. Wal-Mart it’s a coincidence that the interim head of the IRS had to resign because of over zealous treatment of Tea Party tax status. So when Q1 comes out flat blame the tax man.
Hope investors forget that there are huge markets besides the US. Whats happening there. Hope investors forget that Macy’s seems to be on the rebound. Hope investors forget that the US economy has been on shaky ground since 2008.
What we are probably seeing is the end of Wal-Marts simplistic business model. Cut throat price slashing. The consumer who can only show up if the price is very low is tapped out. There are no other reasons to shop at Wal-Mart other than low price.
Wal-Mart branding is 200% cheap price and no other business input. Other retailers have not followed to the same extent as they felt they had something to offer. Service, selection, shopping experience.
Yes Wal-Mart obliterated many traditional competitors. But that play is coming to an end. This may be the high water mark for Wal-Mart. Anyone in business realizes your customers need a capacity to pay. Otherwise they are not customers.
George Gutowski writes from a caveat emptor perspective.