Data released earlier this week by the Commerce Department showed slowing retail sales growth in January. However, a recent report claims about a sadder economic indicator: Fewer shoppers are coming to Walmart.
“Sales are a total disaster,” Jerry Murray, a vice president at Walmart, wrote in a one of the emails unveiled by Bloomberg. According to Murray, this month was off to the slowest start he’d seen in seven years.
Walmart said in a statement: “As with any organization, we often see internal communications that are not entirely accurate, that lack the proper context and represent individual opinions.”
The company, which owns Asda, had been predicted to boost its sales in February from the Super Bowl and other factors including milder weather across the Atlantic.
The previous month marked better sales, judging by another email which recently surfaced.
On February 1, Cameron Geiger, senior vice president at Wal-Mart’s “US replenishment” division, said:
“Have you ever had one of those weeks where your best- prepared plans weren’t good enough to accomplish everything you set out to do?
“Well, we just had one of those weeks here at Walmart US. Where are all the customers? And where’s their money?”
The unveiled emails explained the anxiety in the US retail sector as shoppers shoulder increases in payroll, or income, tax at an already difficult time for the economy.
As The Telegraph reports, shares in WalMart fell 2.1pc on Friday, marking their biggest fall since mid-December.
The news reminds of the end of the payroll tax holiday on Jan. 1 that has forced many Americans to cut back, writes The Huffington Post.
The expiration of the tax cut increased taxes by $1,000 on a worker making $50,000 per year, according to the Tax Policy Center.
A recent report in the New York Times spoke of the consequences of the tax increase, which affected Americans with the smallest paychecks. Those Americans are indeed most apt to shop at Walmart.
You got to stretch what you got,” said Mr. Phillips, 51, a front-desk clerk and maintenance man for a nonprofit housing group who earned $22,000 last year. “That little $20 or $30 affects you, especially if you’re just making enough money to stay above water.”
He went on, adding: “I’m playing catch-up each month. You go to the supermarket and you can’t spend what you used to.”
Retailing analysts and economists predict that high-end earners will largely be spared.
“I wouldn’t expect it to have much of an effect on BMW consumption,” said Richard H. Thaler, a professor of behavioral science and economics at the University of Chicago’s Booth School of Business. “The people who will notice it the most are the ones making the least.”
Ms. Price, 20, who earns about $15,000 to $16,000, prefers shopping at Whole Foods, which is healthier but more expensive. But since the payroll tax went up, she has to go shopping to cheaper shops like Walmart.
“The food that has a lot of fat and food coloring is cheaper,” she said. “It’s a lot more expensive to eat healthier. But now I’m actually looking at the price tag on things rather than grabbing them.”