The last quarter of Wal-Mart's co-street sales growth in the United States market was lower than expected, and there was a marked slowdown in the flow of door-to-door customers, leading to a renewed cautious market outlook for United States consumer spending. After the release of the newspaper, Wal-Mart stock prices fell by about 6 per cent.
Commissary sales are increasing at a low rate in recent years.
United States co-shop sales increased by 2.6 per cent in the current season, below the level expected by analysts by 3.8 per cent and by 4.1 per cent in the previous quarter. This is one of the weakest comparable sales growth rates of Wal-Mart in about six years.
The in-house traffic has only increased by 1.5%, compared to 3% in the last quarter. Average expenditure per transaction increased by 1.1 per cent, indicating that consumers were still buying essentials, but the overall consumption rate was conservative.
Oil prices and household budgets squeeze alternative consumption
According to the report, high gasoline prices and household budget pressures are changing the spending structure of United States consumers. Food groceries remain the most solid category of Wal-Mart, but the choice of consumer goods is weak.
The pharmacies business has also slowed down overall performance. The sale of pharmacies has been affected by the fact that the price of medicines under the Inflation Reduction Act has been reduced by negotiations on a single purchase. Wal-Mart indicated that, if this factor was excluded, the increase in sales from the core United States would be 3.4 per cent.
Increased energy costs are also being channelled to a wider area of consumption. Oil prices are pushing up transport expenditures and reducing household disposable income, making retailers more sensitive to subsequent demand.
All year round, but three quarters are weak.
Despite quarterly sales failures, Wal-Mart increased its net sales growth for the entire fiscal year by 4 to 5 per cent, from 3.5 to 4.5 per cent.
The adjusted income per share is also expected to increase from $2.75 to $2.85, and up to $2.80 to $2.87.
However, the company ' s outlook for the third quarter is conservative and the adjusted returns per share are expected to range from $0.62 to $0.64, lower than expected for Wall Street of approximately $0.68. This means that the market is more concerned about the sustainability of the short-term slowdown in consumption than about the improvement of the year-round target.
In contrast, Target has been expected to increase for the second time this year, owing to improvements in sales and customer flows. This also allows investors to compare more directly the performance of United States retailers in the current consumption environment.