Frugal Frances Says Wal-Mart Is Too Expensive - Taipan Publishing

Frugal Frances Says Wal-Mart Is Too Expensive - Taipan Publishing



Frugal Frances Says Wal-Mart Is Too Expensive
Todd M. Schoenberger, Managing Editor, Taipan's Tipping Point Alert
Monday, March 08, 2010
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The average salary for a typical shopper at Target is $55,000 a year. If you go to a Wal-Mart, you’ll see that its shoppers average $24,000 a year in annual income.

And during these horrific economic days/months/years (take your pick), more and more of these shoppers are driving by the Targets and Wal-Marts of the world and doing their grocery shopping at dollar stores and heavily discounted shops.

There used to be a time when shoppers considered stores such as Family Dollar, Dollar Tree and Dollar General as “taboo” and would never consider shopping there. Now, dollar stores are “in vogue” and, along with discount warehouses such as Costco, consumers have come to depend on these places to survive.

When North America economist Dave Rosenberg was employed by Merrill Lynch & Co., he used to talk about the “frugal future.” Rosenberg’s thesis was about the amount of debt individuals (who had very little margin for error) had on their household balance sheets. A drop in household wages, or even sudden expenses such as emergency healthcare, could cripple a family – economically – for the immediate future. Well, it seems the future is now.

Wal-Mart, for the first time in its corporate history, actually had a down quarter in terms of sales. The retail giant, which sells everything from clothes to milk to brake pads, reported same-store sales had declined 2.0% last quarter. To compare, Dollar General had a quarter-over-quarter retail sales boost of 9.2%, and 10.6% for the entire year.

Dollar Tree joined the party by reporting a jump of 6.6%, and Family Dollar saw its retail sales rise 2.4%. Even Costco got in on the act by having its sales rise 2.0% in the quarter.


al-Mart is fighting back, though. Its recent ad campaign, “Save Money. Live Better,” claims shoppers can save $55 a week compared to supermarkets. But a recent survey by WSL Strategic Retail showed that three-quarters of dollar-store shoppers believe those stores are even cheaper than Wal-Mart.

The point: These are frugal times! But, more importantly, how bad is our economy/sentiment/confidence when we can’t even think of Wal-Mart as the cheapest place to buy our groceries?!

I suppose the next step below the dollar stores will be soup lines. And if we get to that point, then you know the economic apocalypse is probably upon us.

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