“When GM sneezes, America catches a cold.” This is something people used to say back when General Motors was something more than a pension fund that made cars. Basically it means that when an economic engine like GM is having troubles, it’s a sign of bigger problems.
This came to mind earlier this week, when Bloomberg noted that “Walmart Executives are Sweating Slow February Start”…
“In case you haven’t seen a sales report these days, February Month-to-Date sales are a total disaster,” Jerry Murray, Walmart’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.” Bloomberg.com
Worse, this crappy February comes after a crappy January, which had a different Walmart executive asking, “Where are all the customers? And where’s their money?”
So, what’s the deal? Well, the payroll tax went up, tax forms were late going out, and tax returns will also be late going out. Gas prices in my neighborhood have gone up about 35 cents since the New Year. They are still arguing over the Fiscal Cliff in Washington. So, it’s a crisis in confidence, paired with an actual pinch in spending money.
So, looking at the old example, you can certainly see how these negative economic factors would cause people to put off buying an $18,000 car from GM. But Walmart? Where a can of corn is 48 cents and my last pair of shoes was ten bucks? Yikes!
So, what do you think? Are you seeing smaller crowds at Wally’s? Are you tightening your belt? What things are you cutting back on or delaying? Let us know and, despite it all, have a great weekend!
