Looks like Wal-Mart had a rough weekend. Despite all the predictions of a big post-Thanksgiving book, sales trickled for the giant, anti-union, sex-discriminating retailer. Is this more of the Bush economy at work? Is the upturn in his own mind?
Worries about the sustainability of the US economic recovery were stoked on Sunday after Wal-Mart, the discount retailer that is a bellwether for the country’s retail sector, announced that sales grew by only 0.7 per cent in the year to November.
The world’s largest retailer had estimated growth of 2 to 4 per cent just 10 days ago. But Wal-Mart revised its estimates down on Saturday evening after disappointing sales on “Black Friday”, the day after Thanksgiving so called because it is traditionally the time retailers move into profit for the year. It is an indicator of spending for the holiday season, when a quarter of annual retail sales are rung up.
Wal-Mart said sales had fallen “below plan” in the last week of November and sales growth was down on the 2.8 per cent annual rate it had reported for October.
The weakness suffered by Wal-Mart, if repeated elsewhere, would add to concerns about the durability of the US economic upturn. Widespread reluctance by consumers to maintain their free and easy spending habits would slow the economy sharply.
In recent years, and in the recession of 2001, US consumers defied predictions that their appetite for new goods would diminish. A slowdown of consumer spending would add to recent international dollar-related concerns about the prospects for exports to the US.