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Wal-Mart CEO: "It's not a V recession"

Written By Brian Hicks

Posted April 16, 2009




 As the world’s biggest retailer with a market cap of over $198 billion, Wal-Mart is more than just a discount store.

With its fingers in nearly every area of the consumer economy, the king of the big box  is the ultimate compass into the direction of Consumerville-which by the way accounts for over 70% of our GDP.

That being said, what goes on after folks pass the greeter tells us more about the state of the consumer than much of the other data.

So when the CEO of the discounter talks about the economy, people tend to notice.

Here’s what he had to say about our “green shoots” yesterday….

From Bloomberg by Chriss Burritt entitled: Wal-Mart’s Duke Sees ‘Lot of Stress,’ Slow Recovery for U.S.

“The U.S. economy won’t “just bounce out and come back” from the current recession, Wal-Mart Stores Inc. Chief Executive Officer Mike Duke said in an interview on NBC’s Today show.

Consumers battered by unemployment are buying cheaper cuts of meat, spending more on vitamins to avoid trips to the doctor and buying flat-panel televisions instead of taking vacations, Duke said today.

“In talking to our customers all across the country, I think there is still a lot of stress,” Duke said. “It’s not a V recession, where we’ll just bounce out and come back. This is one that is going to take a sustained change in the way that families live.”

Duke, who took charge of the world’s largest retailer Feb. 1, said Wal-Mart shoppers are buying in cycles, spending more when they get paid and cutting back when money runs low. More customers are using cash, he said.

“What we see is, at the end of the month that’s just before traditional paydays, the customer is in that situation where they’ve only got a few dollars to spend,” he said.”

Wal-Mart, by the way, missed analysts expectations last week in regards to same store sales.

Revenue from U.S. stores open at least a year increased 1.4 percent in the five weeks ended April 3. That missed the 3.2 percent average estimate compiled by Retail Metrics Inc., a Swampscott, Massachusetts-based consulting firm. In February, same-store sales had gained 5.1 percent.

Now people are even skimping at Wal-Mart.


Related Articles:

Warren Buffett on the economy: “It’s fallen off a cliff”  

Rasmussen: 53% say 30’s style depression is “somewhat likely”

Nancy Pelosi: “500 Million American Jobs a Month” at Risk  

Jim Rogers: “This is not going to solve the problem”  

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