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Biggest retailer frets over U.S. economy
Posted By Stewart Stogel On 12/12/2012 @ 8:57 pm In Front Page,Money,Politics,U.S. | No Comments
NEW YORK – The U.S. economic recovery is on shaky ground, according to Mike Duke, the president and CEO of Walmart, which “serves customers and members more than 200 million times per week.”
“Customers are still fragile. This economic recovery is still very close, but we see some positive signs with the information from consumers, but those signs have been very muted,” said Duke, whose operations reported fiscal year 2012 sales of some $444 billion and 2.2 million employees.
Speaking to a private meeting of the Council on Foreign Relations in New York City, Duke explained that his company’s findings were based on data derived from the shopping habits of Walmart “moms” who are a “pretty good barometer” of trends in general.
“One week before the election only 25 percent of our customers knew about the fiscal cliff. One week after, it rose to 75 percent,” he said.
Those findings were relayed directly to the White House in a recent meeting with business leaders, said Duke.
“They were receptive, and wanted us to provide more (polling) data,” he said. “Fifteen percent of our customers tell us that the controversy over the fiscal cliff will impact what they spend on Christmas.
“They want this controversy solved,” he said. “Customers are still trying to get by month to month, paycheck to paycheck, their purchasing habits are still under a lot of pressure.”
He said all he has to do is look at what his stories are selling.
“We can see it by the products customers buy,” he explained.
The polling was done prior to the months leading up to the recent U.S. presidential elections and continued thereafter.
“Unlike many polls we did not stop on election day, but continued thereafter,” he explained. “We believe that this is a critical time for the country and there are problems that need to be solved.”
Duke pointed out that as each month ends, buying habits revert to basics rather than luxury items.
“The administration needs to address a reduction in spending and entitlement reform. We need a comprehensive plan that does not keep this debate going and going,” he said. “Bills come to due and many families need to pay bills so they just buy the basics.”
His comments suggested that the administration’s concept of “spreading the wealth” hasn’t reached many yet.
“Customers downsize at the end of the month. At the beginning of the month a Walmart mom might buy a large pack size of diapers. At the end of the month, she might buy a smaller pack. It just means that she has run out of money,” he said.
Duke was questioned about the administration’s efforts to raise the federal minimum wage and how it would impact on Walmart.
He didn’t offer specifics but did say he did not think it would be an problem for Walmart and added that market pressures would force his company to be “competitive.”
But he noted that for every hourly job that came open at Walmart this year there were on average five applicants.
Two legal issues also came were also discussed.
On the recent fire in a Bangladesh factory that produced clothes for Walmart and saw more than 100 workers killed, Duke said all ties with the company were severed.
“It was an illegal subcontractor of a company we did business with and we severed ties with both. We will not do business with companies that engage in such practices,” he said.
On the federal probe into allegations that Walmart offered bribes to do business overseas, Duke would only say:
“We are fully cooperating with the Justice Department. We do not condone such actions. We will do whatever is required. The investigation is ongoing.”
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