Aug. 15 - Wal-Mart's sales slump could be an early indicator of bigger problems for the retail sector- as consumers around the globe shy away from anything they don't absolutely need. Bobbi Rebell reports.
Wal-Mart sells just about anything a consumer could want And so when its sales results fall short- it sends a broader message about the economy: Telsey Advisory Group's Joe Feldman: SOUNDBITE: JOE FELDMAN, SENIOR MANAGING DIRECTOR, TELSEY ADVISORY GROUP (ENGLISH) SAYING: "It definitely seems like there is a slowdown, broadly speaking, at that more moderate consumer, certainly in the U.S. and globally as well. I mean, there was some sales pressure as well. But here in the U.S., the 2 percent payroll tax is definitely weighing on the consumer. The paycheck cycle was still very pronounced for Wal-Mart meaning people were really timing purchases around when they get their paychecks." Wal-Mart didn't just miss on its same store sales- the discounter lowered its outlook for revenue and profits for the year. Shares of Wal-Mart fell on the news. But the pain was selective- and looking at what sold and what sat on the shelves- is a window into what's going on in retail. SOUNDBITE: JOE FELDMAN, SENIOR MANAGING DIRECTOR, TELSEY ADVISORY GROUP (ENGLISH) SAYING: "Grocery was fine and we are still seeing grocery fine. But if you remove that from the table Apparel was a better category for them. That's been mixed from a lot of the retailers that have been reporting so far and next week I think it will be mixed as well. Home was actually pretty good. They are still seeing home furnishing trends being very strong. Bed and bath. Sporting goods was actually better than we had expected so I think that might bode well for Dick's Sporting Goods. We do think next week, back to the home theme, Home Depot, Lowe's will do well. Pets was another good category. So I think that bodes well for Petsmart." Also tough for Wal-Mart- international sales were not up as much as hoped. The company says it will be doing more to control costs in those markets.