Wal-Mart announced yesterday that it expects sales to be down at the end of the year due to cuts in government programs and benefits, especially the recent cuts in the SNAP, or food stamp program. About 18 percent of all food stamp dollars issued in the U.S. are spent at Wal-Mart. In addition to the food stamp cuts, customers are also facing increasing uncertainty due to health care costs and the tax increase. This statement conflicts with statements made earlier in the year that the cuts would actually spur increases in Wal-Mart’s profit margins. Since Wal-Mart is known for low prices, many consumers were expected to turn to Wal-Mart instead of higher priced grocers and retailers. However, since the actual cuts, Wal-Mart’s sales have been lower than expected, prompting the revised statement.
Holiday Marketing Plans
In response to the slower-than-usual increase in revenues, Wal-Mart has decided to join other retailers in opening on Thanksgiving for black Friday sales. Holiday and sale items are already being marketed aggressively online and in catalogues. In addition, Wal-Mart has decided to bring back the layaway program and cut prices even more drastically than usual. Holiday sales typically account for about 20-40 percent of the retail giant’s total revenues. How do you feel about stores opening on Thanksgiving for black Friday? Is this a necessary shift to keep retail sales growing? Should customers and employees have to miss out on Thanksgiving with their families to catch sales?