“Last week, Bloomberg News reported that Walmart’s sales in the first days of February were abysmal. In internal e-mails that were leaked, one corporate vice-president described the situation as ‘a total disaster,’ while another asked, ‘Where are all the customers? And where’s their money?'” Packer writes. “The executives answered their own question. Their customers’ money — some of it — has gone back to the government, in the form of the two-per-cent increase in payroll taxes that took effect with the new budget deal on New Year’s Day… It’s amazing how little attention the payroll-tax increase got at the time — maybe because so few of the players and observers involved could imagine how much difference fifteen dollars out of the weekly paycheck of someone earning forty thousand dollars a year could make. It made enough difference to send Walmart’s earnings into a temporary free fall.”
Packer writes, “The Administration and Congress have overestimated the recovery countless times — was the end of the payroll-tax cut one more example? Walmart’s customers needed that fifteen dollars more than most Washington politicians and Apple Store shoppers might have guessed. ‘The worse, the better’ is bad ethics; it also turns out to be bad economics, and, ultimately, bad for business. America’s vast population of working poor can only get so poor before even Walmart is out of reach.”
Read more in the full article here.
MacDailyNews Take: It all comes down to TCO. Some things are worth the price we pay, others are not.