The core of the problem rests with Wal-Mart’s customer base – middle class and poor Americans. This is a huge and growing segment of the American population, since wealth in the US is increasingly being concentrated in a small segment of the population which certainly doesn’t shop at Wal-Mart. Furthermore, within Wal-Mart’s customer base, there has been a shrinkage of the middle class and an expansion of the poor class since the depression hit in 2008. Depression is the right word to use for Wal-Mart’s customers, over one-third of whom are on food stamps. Mike Duke, the CEO of Wal-Mart, describes his customers as “broke” at the end of every month, when they cease to shop at his stores even for essentials until their next government support check comes in. These are “average” Americans, which means they have $10,000 or less in savings to their name, they clearly live paycheck to paycheck, they are burdened with debt, they have absorbed the bulk of the enormous job losses that have occurred in this depression, and if they have a job they haven’t see a real pay increase in over a decade.
Besides the fact that their customers stop shopping during the fourth week of every month, Wal-Mart sees some other patterns. Sales pick-up noticeably on days when government unemployment and social security checks go out, which says customers flock to the stores the minute federal “stimulus” arrives in their mailbox. There is a once-a-year windfall that also affects sales in the winter, and that is the federal tax refund that these consumers count on as their equivalent of an executive bonus. Of course, it is not really a bonus, but is the consumer’s own money resulting from allowing Internal Revenue to take too much in taxes out of their weekly paycheck. This is really the only form of savings for most Americans, and it should really be considered a one year savings plan, since the money is spent instantly when it is received.
Something to like