Wal-Mart faces brunt of sluggish economy, needs to change track
Uncle
Sam is running out of money. Er...no...we don’t want to give you another treatise on the fiscal deficit situation in America. We were in fact referring to ‘Uncle Sam’ Walton’s Wal- Mart, which has commanded tremendous respect & fear among companies across the world & is a nation in itself. It generates annual revenues equivalent to about 40% of India’s GDP & much higher than GDPs of many countries. However, as of now, Wal-Mart seems to be in ill-health. “Many of our customers are running out of money towards the end of the month,” CEO Lee Scott recently said, while announcing lower than- expected quarterly profits (second quarter) and a cut in Wal- Mart’s full year earnings forecast. Blame it on rising economic pressure in the US. No doubt, high fuel prices, climbing interest rates among others are hurting its sales. Other retailers like Target, Kmart Corp. and Home Depot too are facing the crunch; however, the most affected seems to be the Wal-Mart. Shares of the retail giant have fallen by about 5% in last 15 days. Even if a longer period, say one year, is to be considered, Wal- Mart shares were almost flat while close rival Target Corp.’s share prices were up by almost 11%. Moreover, the last quarter decision to do away with their operations in Germany and South Korea, and now an expected annual loss at their Japanese unit (sixth year in row) speak volumes.
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Source : IIPM Editorial, 2008
Uncle
Sam is running out of money. Er...no...we don’t want to give you another treatise on the fiscal deficit situation in America. We were in fact referring to ‘Uncle Sam’ Walton’s Wal- Mart, which has commanded tremendous respect & fear among companies across the world & is a nation in itself. It generates annual revenues equivalent to about 40% of India’s GDP & much higher than GDPs of many countries. However, as of now, Wal-Mart seems to be in ill-health. “Many of our customers are running out of money towards the end of the month,” CEO Lee Scott recently said, while announcing lower than- expected quarterly profits (second quarter) and a cut in Wal- Mart’s full year earnings forecast. Blame it on rising economic pressure in the US. No doubt, high fuel prices, climbing interest rates among others are hurting its sales. Other retailers like Target, Kmart Corp. and Home Depot too are facing the crunch; however, the most affected seems to be the Wal-Mart. Shares of the retail giant have fallen by about 5% in last 15 days. Even if a longer period, say one year, is to be considered, Wal- Mart shares were almost flat while close rival Target Corp.’s share prices were up by almost 11%. Moreover, the last quarter decision to do away with their operations in Germany and South Korea, and now an expected annual loss at their Japanese unit (sixth year in row) speak volumes.For Complete IIPM Article, Click on IIPM Article
Source : IIPM Editorial, 2008
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