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Walmart’s Dependency on Government

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walmartWalmart discloses in its annual report how a reduction in food stamps offered by the government will negatively affect its business.

Walmart shoppers are particularly sensitive to fluctuations in the price of gas, to small tax increases or to anything that adds another $20 burden to a household in any given week. Budgets are tight and getting tighter all the time, in spite of a slowly recovering economy.

Walmart is hardly the only retailer to be affected by a reduction in SNAP benefits, or to say so in financial documents. The dollar store segment is also vulnerable. Roughly $4 billion in SNAP benefits were vaporized, money that was once spent at U.S. stores, not just at Walmart. This was bad news for shoppers and retailers, across multiple channels.

As one grocery executive said in an online retail forum regarding the issue, “This cut hurts all of our sales, not just Walmart, let me make that clear. The struggle is universal for retailers, and sales are down around 8-10% since the first of the year.”

I’m not a fan of criticizing other reporters or publications, but these headlines are designed to get clicks, to be shared, to fan the flames of outrage. In this case, it’s a false and very misplaced outrage.

Walmart didn’t just reveal how poor its customers really are, it revealed just how poor so many U.S. shoppers are.

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E.J. Smith - Your Survival Guy

Preparing your investments and family for when disaster strikes.
E.J. Smith is the Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention. E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zilldjians. He grew-up worshiping Neil Peart of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@youngresearch.com. Sign up here to receive all the best content from Richardcyoung.com each week.

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