Wal-mart leading economic indicator

The old saying was “as goes Detroit, so goes the nation.” Today, we should substitute “Wal-Mart” for Detroit.

The ubiquitous retailer is the nation’s largest private employer (1.1 million); it accounts for 9 percent of US retail sales. Its annual US sales of $203.7 billion dwarf the combined sales of the next four largest US retailers: Home Depot, Kroger, Target and Sears.

To control costs and manage deliveries, Wal-Mart implemented a costly technology system in the ’90s. Electronic data exchange allows it to optimally manage inventories with its 21,000 vendors. And the vendors take note: Wal-Mart accounts for more than half the sales of AT&T phone cards; 28 percent of Dial products; and 20 percent of sales for Hershey Foods, Clorox, Revlon and Rayovac.

Analysts do not expect President Bush’s tax cut to have much of an economic stimulus, based on sales at Wal-Mart.

Sales at Wal-Mart and other “box” stores (Costco, Target and even Long’s Drugs) have eroded sales at traditional grocery stores. Currently there are grocery store strikes around the country, brought about in part by firms trying to hold the line on labor costs. The average unionized grocery store employee makes $13.00 an hour; the average non-unionized Wal-Mart employee makes $8.50 an hour.

By Kathy E. Gill

Digital evangelist, speaker, writer, educator. Transplanted Southerner; teach newbies to ride motorcycles! @kegill

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