Why Walmart is getting too expensive for the middle class

[Newsjock]

Source: Yahoo Finance

... The sliding fortunes of Walmart (WMT) may best represent this recovery gap. Overall, retail sales rose 4.2% in 2013, or about 2.7% after accounting for inflation. And consumer confidence surveys show Americans on the whole feel considerably better now than they did a year ago. That ought to indicate good times for the nation’s biggest retailer.

Yet Walmart is struggling with weak sales and an underperforming stock price. ... Walmart, though known as a discounter, may be too expensive for millions of shoppers finding themselves more pinched — not less — as the pace of the so-called recovery accelerates. “Their consumer is shifting downward,” says Joe Brusuelas, chief economist for financial-data firm Bloomberg LP. “The competition for Walmart is changing. It’s now dollar stores.”

... What’s alarming for retailers such as Walmart is the sharp drop in income in the middle tier of earners. In 2001, taxpayers earning $100,000 or less accounted for 60% of total income; in 2011, they accounted for less than 50%. In basic terms, that means there are fewer middle-income families with money to spend, leaving retailers — and the overall economy — more dependent on a smaller group of high-income consumers.

Read more: http://finance.yahoo.com/blogs/the-exchange/why-wal-mart-is-getting-too-expensive-for-the-middle-class-215417616.html

[liberal N proud]

1. Pay your people, so they can afford to shop in your store!

Walmart is complaining about the middle class eroding when they are part of the problem.

[stillwaiting]

8. Even the fascist Henry Ford knew this.

I sometimes think that governments around the world are killing the prosperity of their middle classes to try and save this planet. I know that many will laugh at that.

In order to do this effectively, those actors in government would have to expertly divide our society so that there would be little chance of us ever working together on almost anything. I think they've done a pretty good job of this.

I strongly doubt they could ever be honest and open with the public if that truly were a goal they were pursuing.

From my perspective, it certainly seems like they are actively trying to level the middle class. Whether or not it is for "altruistic" purposes is up for much debate.

If they ARE successful at destroying the prosperity of the working and middle classes around the globe (even worse than they already have), I just hope that we don't collectively/globally let the elite hoard all of the wealth that they confiscate in the process.

[canoeist52]

2. Middle income is $100,000. now?

When did that happen? And I would say second-hand stores such as Goodwill and Salvation Army are their real competition and represent better value. Dollar stores are just selling outright junk.

[name not needed]

3. Yes, 100k is middle income

Unless you count cops and middle school principals among the wealthy.

[bvar22]

7. Only 6% of Americans make over $97,000/yr.

[WillowTree]

4. Am I the only person who has a problem with the math in that last paragraph?

"In 2001, taxpayers earning $100,000 or less accounted for 60% of total income; in 2011, they accounted for less than 50%."

That would indicate that more taxpayers are earning more than $100,000, wouldn't it?

I'm not being intentionally dense, and I know there must be a flaw in the way I'm reading that. Someone help me, please.

[localroger]

5. 50% of INCOME, not individuals

It means that more wealth is being concentrated in the hands of the wealthy and less is spread around to those in the bottom 90% (of individuals).

[herding cats]

6. Perhaps the chart will help clear it up

If you look at the attached chart used in the article you'll see how fewer people are making more than 100k in 2011 vs 2001.

http://l2.yimg.com/bt/api/res/1.2/H8yHCnPcpEhWA7FJ.boh2Q--/YXBwaWQ9eW5ld3M7cT04NTt3PTQwMA--/