Walmart Internal Emails: Sales Figures a "Total Disaster"

Discussion in 'Economics' started by JamesL, Feb 17, 2013.

  1. JamesL


    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.
  2. walmart?

    the only benefits they offer employees is, "If you work for us, you qualify for food stamps."

    Almost everything they sell is imported, so they need a strong dollar.

    How bout the shopping experience? Ever heard anybody say they like shopping at Walmart? Especially on a weekend.

    It's so like ten years ago.

    Back in the old days on a Saturday they would walk across the border just to shop at Walmart for a day, and at night you would see them all cross back over with their Walmart bags, full of ten years ago fashion products that before they had only dreamed of.

    And it was a big deal when Walmart came to town and you could buy things cheap just like city people.

    So what's the plan? Open more and more stores and sell imports cheaper and cheaper?

    Shit, there aint nothing they sell there anymore I probably can't get cheaper on amazon

    it was a necessary evil that has out lived it's usefulness

    I still go there

    but only as a last resort
  3. Wow, they sure do get emotional.