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What Does the Drop in Walmart Sales Say About the Economy?

By Elizabeth Smith | Small Business

For the first time in quite a long time, things may not be looking too great for our favorite mega retailer, Walmart. NBC News reports that Walmart has experienced a decrease in sales as well as a “cautious outlook for the rest of the year.” This was a big surprise to many.

Walmart’s Weird Excuses

Slate.com explores Walmart’s quarterly earnings report in depth. After the retailer reported a 1.4 percent quarterly decline, it released a statement containing a set of seemingly bizarre excuses:

“Wal-Mart blamed this drop on essentially everything under the sun except people not wanting to shop at their stores: “A delay in income tax refund checks, challenging weather conditions, less grocery inflation than expected, and the payroll tax increase” were all said to have created “considerable headwinds” for America’s No. 1 retailer.”

In contrast, Whole Foods reported 13.6 percent overall growth last quarter. Slate.com sums it up:

“Whole Foods has a different customer profile than Wal-Mart, of course. But there’s just as much weather in Whole Foods’ parking lots. Its customers pay taxes, too. And it’s not just that they didn’t scale back their purchases, there appear to be more of them than ever before. By the same token, restaurant sales have been surging ever since the broader economy bottomed out in 2010.”

Clearly, when it comes to Walmart’s dip in sales, there is more to it than bad weather and increased payroll tax.

This News Might Be Good

If fewer people are shopping at Walmart, while more people are shopping at Whole Foods, it might actually be good news (for everyone but Walmart). If the economy is back in an upswing, it stands to reason that more people can afford Whole Foods and will choose to shop there instead of slumming it at the local Wally World.

Certainly, I do not wish Walmart any ill will, but if more people can afford to shop at more expensive grocery stores, I choose to take it as a sign that the American economy may just be on its way back.

Have you found yourself opting for more expensive grocery purchases recently?

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