Walmart announces improving sales
Shoppers exit a Walmart store in Valley Stream, N.Y.
Today America's largest retailer, Walmart, said it's on track to end a slump in sales in its US stores - the core of Walmart's business. The company announced that sales at US stores open at least a year rose in the most recent quarter, after nine consecutive quarters of decline. Those sales represent nearly all of Walmart's total US revenue. And the company's U.S. division still is, by far, its biggest business.
John Champion is a retail strategist of Kurt Salmon in Atlanta. He says Walmart lost its way for a while by experimenting in new product offerings that just didn't work. The company took some brands off the shelf - especially in the fashion department - and wound up giving consumers a mixed message. He says Walmart got away from the thing that made it successful in the first place: offering goods at the lowest prices. Champion says that when Walmart got away from that core message, retailers such as the numerous and fast-growing "dollar" stores were ready to step into the void.
Champion says Walmart learned its lesson, and is rebuilding its status as the country's "low price leader." He says that's why they had good news to report today. But just because Walmart's doing well doesn't necessarily mean the economy is doing any better. Champion says Walmart's number are really just the result of a good business strategy. Retail has performed reasonably well over the past year, he says, but the jury is still out for the upcoming holiday shopping season.
Walmart also announced today that it's going to cut prices by another $2 billion over the coming year. Champion says that for most retailers that would be a daunting number. But for a company as vast as Walmart he says it won't be difficult to achieve.
Also on the show today, burdened by $458 million of debt, and threatened by numerous lawsuits, officials from the city of Harrisburg, Penn., filed for bankruptcy protection. This is heart-stopping news for the Marketplace Daily Pulse, as municipalities rarely file for bankruptcy. And the bad news is that there are several other municipalities that are in danger as well.