Wal-Mart Executives Sweat Slow February Start in E-Mails By Renee Dudley - Feb 16, 2013 8:13 AM ET Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News. “In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.” Wal-Mart and discounters such as Family Dollar Stores Inc. are bracing for a rise in the payroll tax to take a bigger bite from the paychecks of shoppers already dealing with elevated unemployment. The world’s largest retailer’s struggles come after executives expected a strong start to February because of the Super Bowl, milder weather and paycheck cycles, according to the minutes of a Feb. 1 officers meeting Bloomberg obtained. Murray’s comments about February sales follow disappointing results from January, a month that Cameron Geiger, senior vice president of Wal-Mart U.S. Replenishment, said he was relieved to see end, according to a separate internal e-mail obtained by Bloomberg News. “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?” Geiger asked in a Feb. 1 e-mail to executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?” Shares Fall Wal-Mart fell 2.2 percent to $69.30 yesterday at the close in New York for the biggest decline since Dec. 12. The shares rose 12 percent in the 12 months through yesterday, compared with a 9.4 percent gain for the Dow Jones Industrial Average. “As with any organization, we often see internal communications that are not entirely accurate, that lack the proper context and represent individual opinions,” David Tovar, a Wal-Mart spokesman, said in an interview, adding that the company will report fourth-quarter earnings on Feb. 21. Wal- Mart’s fourth quarter ends in January. Murray declined to comment and Geiger didn’t return telephone and e-mail messages seeking comment. Both executives attributed the performance to increased payroll taxes and delayed tax returns, which Geiger called “a potent one-two punch,” according to the e-mails. Tax Refunds About $19.7 billion more in tax refunds had been delivered to shoppers by this time last year, according to an analysis prepared by Wal-Mart’s Global Customer Insights & Analytics division that was attached to Murray’s e-mail on Feb. 12. The retailer expected returns to be delayed by three to four weeks because of the late release of tax forms and additional, federally mandated tax-fraud scrutiny. When a payroll-tax break expired Dec. 31, Americans began paying 2 percentage points more in Social Security taxes on their first $113,700 in wages. For a person making $40,000 a year, that is about $15 a week. The extra tax bite is about equal to a year of car insurance for a family making $30,000 or a basket of groceries per month for a family making $50,000, according to Wal-Mart’s analysis. Other retailers who court low-income Americans also are bracing for the rising taxes. Customers’ Wallet Higher payroll taxes “go against our customers’ wallet,” Family Dollar Chief Executive Officer Howard Levine said on a Jan. 3 conference call. “Clearly, they do not have as much for discretionary purchases than they did.” Wal-Mart’s Geiger in his e-mail urged employees to improve business by “fixing something that could really make a difference to our performance.” He quoted Tim Yatsko, the company’s executive vice president of global sourcing, saying: “We need to ‘stop the stupid.’” Wal-Mart U.S. CEO Bill Simon said during a Feb. 1 officers meeting, the minutes of which were attached to Geiger’s e-mail, that the troubled economy leaves little room for internal errors. “In an environment like this, we can’t afford to hurt ourselves,” Simon said, according to the minutes. “Self- inflicted wounds are our biggest risk and our toughest enemy.” Company Challenges Simon cited negative economic growth, declining consumer confidence and rising unemployment as challenges facing the company. The U.S. economy shrank at a 0.1 percent annual rate in the fourth quarter, and the unemployment rate rose 0.1 percentage point to 7.9 percent in January. The Conference Board’s measure of consumer confidence declined last month to the lowest since November 2011. Even with a slow January, Wal-Mart is gaining market share steadily, Simon said. “That points to our competitive landscape, which means everyone is suffering and probably worse than we are,” Simon said, according to the minutes. The company must focus on process and execution, he said. “We have to fight against the tougher economic environment to earn a bigger share of a smaller consumer spending pie,” Simon said, according to the minutes. http://www.bloomberg.com/news/2013-...ves-sweat-slow-february-start-in-e-mails.html
Hello! Congratulations on catching up with last week's business news! Hey I wonder what February 20's housing starts #'s will be....#excited!!! You do know that congressional Republicans were the ones that threatened to default the US' credit rating back in December unless they got a payroll tax increase, don't you? Are U happy with it? You seem to have a lot of trouble with u-nderstanding this issue in particular.
Walmart didn't profit as obscenely as they usually do in January? Ok. Was someone arguing that ending the payroll tax holiday wasn't going to have an effect on the economy?
I try to avoid Wal*Mart as much as possible nowadays. They used to have the lowest prices, but not anymore. They made you think they were the cheapest by putting the cheapest DVD player in the middle of the floor for $20 back when the lowest you could find it anywhere else was $30 to $40. The rest of the DVD players in the aisle would cost more at Wal*Mart than other places. I go to any grocery store for groceries, because they are all the same price. If I need anything in Wal*Mart like electronics or something I can't find at a grocery store then I buy it on line. It's always cheaper. Why deal with the drive and their lines? I notice I went to Wal*Mart a lot before, but they are slowly becoming the Galleria to me. A useless, crowded place in Houston a lot of people still use.
Because when you make a comparison, it's good to know what you are actually comparing. 2013 - 7 for example, falls somewhere between 2000-2008, btw.
**** Walmart. They pay for **** and treat their employees like ****.. Walmart is a parasite on society. Not anymore Obama's fault than the Republican law makers that wanted it as well.
lol the liberals have been quick to try to turn this into a "I hate rich people discussion" and an attack on Walmart the company. They're avoiding the fact that they know Walmart is representative of consumer spending overall.
What is the relevance of this? First of all, why are we using 11 days of data to measure anything? Second, this is their worst month since 2006, when the economy was booming. What does that tell us, exactly? If they were doing poorly when the economy was booming, does that mean the economy is booming now?
I'd think the tax refund issue is probably their biggest problem. $19+ billion held back is gonna show up somewhere. Heard a girl at the Shell station I was filling up on Sunday sweating the tax return issue with her girl friend behind the counter.
I don't hate rich people, statistically I am considered rich by many people. However I do not like wealthy people or corporations that leave huge unaccounted for externalities that the rest of society pays for. Walmart is terrible, and to use it as a barometer is foolish.
let's get rid of them then, and all those people who work for them can go load delivery trucks for Amazon...
also, something about one data point and not a macro-aggregate http://www.voanews.com/content/us-sees-uptick-in-consumer-spending/1594623.html someone needs to start subsidizing economics courses for some of you. srsly.
That's what I was asking you. Sales at Walmart, and probably the whole US retail economy, took a hit from ending the payroll tax holiday. Everybody expected that would happen. That doesn't mean you shouldn't end the holiday. So, what's the point of this thread? It's stupid.
Why must you label everything? Could it be Wal-Mart itself is becoming less relevant in an online consumer era? People who shop at Wal-Mart do so not for the ambiance or atmosphere. They shop there because they always want the lowest price. If they can find it cheaper online and save on both gas and time then why bother with Wal-Mart? Wal-Mart is just the middle man crying because holiday shopping is over.
I'm not even going to talk about the payroll tax but I could care less about Walmart, the multi-billionaire Walton family, or financially supporting the sweatshop working conditions in China. Welcome to reality where everyone else in world occasionally has a bad month. We've all been there. Welcome to a post-2007 recession world Walmart, during in which this whole time you've padded your pockets and fattened your bellys selling your inferior junk goods to the rest of us.
