Wal-Mart’s earnings came out today and disappointed analysts with both weak international performance while “Sales at stores open at least a year fell 0.3 percent at Walmart U.S, the company’s biggest unit by far.”
The company is blaming this on poor economic conditions. But while economic conditions could certainly be better (sequestration and the expiration of the payroll tax holiday aren’t helping) total retail sales are clearly rising this year. I’d say Wal-Mart is feeling the tremors of the same macro-trend that already destroyed Borders and Circuit City and are dragging Barnes & Noble and Best Buy down: Online shopping is the new impersonal big box store. Wal-Mart’s strength in groceries partially insulates it from that trend, since Amazon hasn’t (yet!) swallowed the grocery industry. But groceries are only part of what Wal-Mart does, and the war of Always Low Prices vs Always Near-Zero Profit Margins isn’t going to be pleasant for Bentonville.
Correction, Aug. 15, 2013: This post previous misspelled Barnes & Noble.