Walmart had bad start to the month because the payroll tax is back???

[Skidmore]

Last edited Tue Feb 19, 2013, 08:23 AM - Edit history (1)

Just heard that now on our local KCRG ABC station. How about that? So they noticed. Now how can we use this, Dems?

Editiing to add link to story:

http://www.ibtimes.com/print/leaked-wal-mart-emails-reveal-poor-sales-send-stocks-plummeting-could-disaster-be-way-1092086

Leaked Wal-Mart Emails Reveal Poor Sales, Send Stocks Plummeting; Could A Disaster Be On The Way?
By CHARLES POLADIAN | FEBRUARY 18 2013 8:14 PM
Several leaked emails from top Wal-Mart executives have sent the stock price down and could signal more trouble ahead for the retail giant.

In some of the leaked Wal-Mart (NYSE:WMT) emails obtained by Bloomberg News , the executives describe February sales as the “worst sales start to a month in seven years.” The leaked emails came from Wal-Mart’s vice president of finance and logistics, Jerry Murray. In the email he says, “February MTD [month-to-date] sales are a total disaster.”

The leaked emails caused Wal-Mart’s stock to slide 2 percent Friday, closing at $69.30. (Markets were closed Monday.) One reason some customers may have stayed away from the retailer could be the higher payroll taxes that kicked in at the beginning of 2013. Delayed income tax refunds, which would mean billions of dollars going to consumers, were another reason for the poor sales start to February. A still-weak economy and persistent unemployment caused Wal-Mart to adjust expectations, but executives believed they would see a spike in sales to begin February due to Super Bowl ads as well as payroll cycles working in their favor.

The disastrous start to February followed a poor sales month in January. The senior vice president of Wal-Mart U.S. replenishment, Cameron Geiger, bemoaned in a Feb. 1 emailed obtained by Bloomberg, “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”...more

[JCMach1]

1. gas price spike

Would be my best guess

[Blue_Adept]

8. Does it really?

I mean, I'm certainly not wealthy, I'm just above the poverty line, but gas has gone up twenty cents in the last month in my area. So now instead of $33 to fill my tank, it's now $35. Is that really, truly, going to make a huge impact on so many people in terms of purchase with a business that big and sprawling?

[uncle ray]

16. the national average has really, truly gone up $.55 in the last month.

do you really, truly believe that the average wal mart shopper can afford the increase without changing their buying habits?

[Blue_Adept]

17. Again, a $2 increase...

I get the gist of it, but the reality is something that people need to think about. We micro-shop based on gas station prices. Two places across from each other are different in price by 5 cents a gallon for example. With a ten gallon tank, what's the difference between the two per fillup? And even if you fill up every week for four weeks in a month, it's really just a few bucks overall that's likely spent elsewhere without thinking. It's attributing too big of a factor to something that truly is small.

[tridim]

12. Yep. Up about 50 cents/per gal here in a few weeks..

And according to the radio this morning, "with no end in sight".

[KamaAina]

18. Gas price spikes rarely happen in winter

what's up? Speculators again?

[ProdigalJunkMail]

2. what's there to 'use'?

people hurting?

sP

[Skidmore]

3. Just pointing out that this analysis by Walmart bears out what

many have been saying about the effects of the payroll tax for the economy. It is data which demonstrates how people are affected by tax policy. Now can we use the data to push for revenues from the wealthy?

[OldDem2012]

10. I'm not seeing the definitive analysis from Walmart on this issue. From your OP...

...here are the three POSSIBLE reasons:

1. One reason some customers may have stayed away from the retailer could be the higher payroll taxes that kicked in at the beginning of 2013.

2. Delayed income tax refunds, which would mean billions of dollars going to consumers, were another reason for the poor sales start to February.

3. A still-weak economy and persistent unemployment caused Wal-Mart to adjust expectations, but executives believed they would see a spike in sales to begin February due to Super Bowl ads as well as payroll cycles working in their favor.

So, let's rank them, shall we?

1. Delayed income tax refunds. Lots of folks who shop at Walmart depend on their annual tax refunds to fuel their shopping from mid-February to March 1. This is the time of year folks purchase those items they've been unable to purchase since their last tax refund. This is THE most valid reason for a slump in Walmart's sales. Once the refunds start flowing, sales at Walmart will pick up.

2. A still-weak economy and persistent unemployment. Additionally, retailers have been laying off their part-time Holiday seasonal employees, reducing disposable income even more.

3. Higher payroll taxes. Sorry....I'm not seeing this factor having as big an impact as you seem to think. Walmart is using this explanation to mask overly ambitious and poor sales forecasting by their senior executives.

[alc]

15. doesn't saying "tax policy affects spending" include the wealthy

Unless you say the wealthy are affected differently, that argument seems to support the people who say raising taxes on the wealthy will decrease their spending. Spending on things that provide jobs like new cars, houses, dinner/travel, etc. And spending on investments - they'll have less money for the investments.

Maybe it will affect the wealthy differently, but I don't think this argument will change anyone's mind. It'll just reinforce the opinion of people who already agree with you while also reinforcing the arguments of people who disagree with you.

[Cooley Hurd]

4. I think it points out the fundamental fact that the economy is driven from the bottom up...

[Skidmore]

6. Exactly. I thought it was a stunning admission because it came from

an internal Walmart business report.

[hobbit709]

5. If you believe that one I got a bridge for you-cheap.

[HappyMe]

7. The payroll tax,

gas prices are up, and it's after the Christmas holiday. All valid reasons for people not to be spending money on extras.

[2Design]

9. bs

[Puzzledtraveller]

11. Every one of my co-workers has complained about it

I work in social services every one of my 20 co-workers are Democrats and every one of them has complained of the payroll tax increase after the holiday expired. Not that I agree it's the primary factor like Wal-mart asserts but it is not under the radar and people are still talking, complaining about it, co-workers and my clients who come in to apply for SNAP and Medicaid.

[stillwaiting]

13. This was entirely predictable, and it's why the payroll taxes should have never been cut

to begin with.

Many of us knew at the time that most people would be yelling and screaming about a "tax increase" if/when the payroll tax reverted to its normal rate.

[Yo_Mama]

20. It's everything combined

It's high gas prices plus the payroll tax hike.

Early February is too soon for the impetus from tax refunds to be felt, but that will hurt the second half of February.

If gas is costing people $20 - $40 more a month and payroll tax hikes are costing them $80 a month (predicated on average household income) it's going to start showing up down the line. For lower income people who watch every penny, the gas costs hit harder and quicker, but the payroll taxes don't help. If you make 20K the payroll tax increase costs you about $33 a month, but many of these people are still paying $20-$40 dollars extra for gas. $50 less dollars a month for a person earning a gross $20,000 annually will absolutely show up in reduced purchasing power.

Also it's cumulative. After 3 months the payroll tax hike will leave people short a bill or two, and that's when the fun really starts.

[alcibiades_mystery]

14. The FICA holiday was pure stimulus spending

It was not a tax cut at all, since the shortfall from Social Security was simply paid out of the general fund.

[Rex]

19. Oh noes, oh noes! Whoas me I only have 40 billion dollars!

When I could/should have 50 billion!

Another round of layoffs and part time hires!