WALMART’S WEAKER SALES MAY SIGNAL ECONOMIC TROUBLE


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Walmart, the U.S.’s largest brick-and-mortar retailer, reported sales rose 1.9 percent in November, December, and January, compared with 4.2 percent during the same period a year earlier and 3.2 percent in 2019’s third quarter.
Operating income dropped 3.7 percent in last year’s final three months.
Holiday sales of clothing, toys, and video games were slow, the retailer said.
The chain’s online sales rose 35 percent during the fourth quarter and were given an extra boost by online grocery orders.
Walmart is forecasting “at least” 2.3 percent growth in fiscal 2021, compared with 2.8 percent in the most recently completed fiscal year. It expects to increase online sales and profits and also to expand its health care centers and launch online advertising sales and other new ventures.
In January, the Target big-box chain revised downward its holiday sales numbers and cut its sales forecast for 2020’s first quarter.
TREND FORECAST: Walmart’s sales have been an early indicator of economic sentiment among lower- and middle-income households… the American majority. The chain’s soft numbers are a sounding alarm that consumers will curtail spending, further weakening the retail pillar of the U.S. economy, which accounts for some two-thirds of the nation’s GDP.
 Walmart’s slowing brick-and-mortar sales also exemplify the fate of department stores trying to maintain a physical presence. Specialty retailers selling products that need hands-on installation or big-ticket delivery, such as tire stores and lumber yards, will survive as will stores offering intensive personal services. Others will face increasing pressure to automate to reduce costs.

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