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Walmart Taking Hits and Plunging?

Walmart felt the cold this winter. Reportedly one of the largest, most profitable retail stores in the United States took a hit in the fourth quarter during a season when much of the country is willing to max out their credit cards and rob Peter to pay Paul to buy holiday gifts for loved ones. Walmart was expecting to eat high off the hog for the holiday season, but were not expecting unforeseen challenges that were out of their control.

Much of the consumers that patronize Walmart are low to moderate income earners. It is this income bracket that many would say have taken the biggest hit during a down economy and have struggled to literally stay alive. Many consumers are experiencing long-term unemployment and were hit with a double gut punch when unemployment extensions were cut off by the Republicans. Food stamps needed by many of Walmart consumers were cut to pass the farm bill. Some speculate layoffs increasing to possibly help CEOs of many corporations to enjoy a happy holiday bonus for themselves. Half of the country endured storms and record-breaking brutal temperatures, keeping many unable to leave their homes to get to work, or look for a job, or shop at their local Walmart for their families. Walmart, known for its incredible discounts that low to moderate income earning families rely on, possibly sunk on many of their customers priority list this winter. Reported in the Los Angeles Times, Walmart plunged 21 percent to $4.4 billion by January 31st. The report goes on to state Walmart’s fourth quarter looked a little sweeter at $5.6 billion last year during this time.

While many businesses would love to be able to say they brought in half of $4.4 billion to finish out their fourth quarter, Walmart reportedly still felt the hit. The retailer has been in the news in the past for alleged mistreatment of their employees. According to Wall Street Journal, Walmart told the Labor Relations Board that any Wal-Mart employee who chooses to strike against the retail store for any reason shall be disciplined. Walmart fully believes they are within their rights to do so. In regards to President Obama raising the minimum wage rate to $10 an hour, Walmart remains neutral on the issue claiming that many of their employees make well over $10 an hour. The chief executive of Walmart US William S. Simon reported to the New York Times that cuts to food stamps was one of the reasons for their 21 percent plunge. He goes on to report that Walmart performed well during the holiday shopping season. He says he is offering an explanation – not an excuse for the hit.

According to USA Today, Walmart expects to continue to feel the cold. Their shares dropped from $1.67 last year to $1.36. Wall Street projected the company at $1.59 a share. Many would say that Walmart is a beast in the retail industry. The amount of money flowing through one of the largest retail stores in America, it is very difficult for the consumers to have a bleeding heart for their 21 percent plunge in revenue. Much of their consumers are those that need a bleeding heart to recognize their plunge. While some Republicans continue to put up blocks to stop assistance to those who have run out of options to assist their families and Democrats struggle to find alternative solutions, Walmart might possibly be correct in its projection of more hits to come to their bottom line. There are many wealthy Americans who believe the problems of the poor are simply the problems of the poor…until there is a wake up call. Whose problem is it now?

Editorial by Meleika Gardner


Los Angeles Times

Wall Street Journal

New York Times

USA Today

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