Wal-Mart posted it wortst sales month in recent memory, with same-store activity dropping .1% All of the big discounts offered by the chain and its new $4 generic drug program could not pull results up. It now appears that the fear that there is a systemic problem at the company have come true.
The results open the Wal-Mart management to further criticism. Does the company have too many stores in the US? Has the chain reached a point of saturation? Or, is the merchandise mix simply so poor that the store count is academic? The current product selections at the stores is just too poor.
Wal-Mart management has failed to address the question of whether the company’s US problems extend beyond pricing. Pricing was to be the fix, and it is not working.
Irony abounds. There is now educated speculation that the cuts at Wal-Mark could now bring down the rate of inflation because the company’s sales are such a large part of the GDP. If other retailers match these price cuts there could be a ripple effect.
What the company can do for the governemnt is small comfort.
Things are getting worse at the largest retailer and the old fixes are not working.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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