Jeff Caplan’s Minute of News: As Walmart profits go down, so do ours
Editor’s note: This is an editorial piece. An editorial, like a news article, is based on fact but also shares opinions. The opinions expressed here are solely those of the author and are not associated with our newsroom.
SALT LAKE CITY — Walmart profits were down last quarter. And yes, I know some of you are thinking, “Oh too bad, Jimmy Walmart has to build a smaller summer mansion, what do I care!”
But let’s reconsider Walmart profits.
Walmart cash registers ring up $20,000 in sales per second. In the time it took you to read that they rang up $100,000. And there’s another $100,000.
Are you getting the idea?
They have 5,000 stores that are chock full of almost everything. Eddie Elfenbein from the Crossing Wall Street blog says Walmart is a better barometer of the U.S. economy than all the government statistics. And what do Walmart’s earnings tell us?
They tell us that middle- and lower-class Americans are already changing their shopping habits. Walmart brought in a ton of money last quarter. Sales were just fine. But we’re all buying the stuff on the lower shelves. Instead of Lucky Charms, we’re buying Magic Marshmallow Oat Cereal.
With inflation knocking at the door we’re buying knock-off products to save money. And it’s squeezing the Walmart profit margins. So are shipping costs, which are through the roof. Even though they’re paying employees more, they’re having a hard time finding store managers — a job that can pay $200,000 a year.
Wall Street knows that, as goes Walmart, so goes the nation. And that’s why the company’s disappointing earnings sent the Dow tumbling 1,100 points this week. Which means that now, Jimmy Walmart has to buy his Lamborghini without the turbo package.
For the rest of us, or anyone building a 401k for retirement, Walmart’s problems last quarter took a 4% bite out of our net worth.
Maybe we can take the bus to Walmart?
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