The retail chain discussed in the article below, Walmart, is roughly equivalent to Britain's Tesco, and caters to the bottom tier of the US consumer market. Most people on fixed incomes, such as myself, are completely dependent upon Walmart for basic necessities such as food. Part of the "flat income levels" to which the article refers is the fact that Social Security recipients did not get our usual cost-of-living increase this year, as prices keep rising. Just prior to finding this article, I bought groceries at my local Walmart (just an easily walkable half-mile from my building), and was shocked by the recently raised prices (some greater than 25%) and decreased selection, just over the past week.
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Walmart's customers are too broke to shop
By Hayley Peterson
Walmart is facing a "perfect storm" that's hurting its sales growth, according to Moody's.
The company's core customers are struggling with flat income levels, and savings from lower fuel prices aren't translating into more retail spending, Moody's vice president, Charles O'Shea, wrote in a note to clients on Wednesday.
The business is also under
pressure from deflation in key product categories, such as food, and the
effects of the strong dollar abroad.
"Walmart is facing an almost
perfect storm when it comes to top-line growth," O'Shea wrote. "Until
the health of the lower-to-middle-income consumer improves, Walmart will
continue to face macroeconomic headwinds in the US."
Walmart said last month that it's expecting virtually no sales growth in the coming fiscal year.
The company had previously projected growth of 3% to 4% for the year,
but lowered its guidance last month citing the impact of
the strengthening US dollar. The company's share price has lost about 16% of its value over the last 12 months.