Walmart and Their Decline in Profits

Image Credit: Nicholas Eckhart

Things will only get worse before they get better. Walmart is still going downhill. At first, the holiday season did not go so hot for them as shoppers did not spend very much at their stores with increasing competition and prices. Competition continues to increase as they lose more and more customers. They still had to cut their prices after the holiday season in order to attract consumers. In addition, the bad weather has forced them to shut down many of their stores due to the result of poor sales. Very little shoppers wanted to go out to shop during the snowstorms. But who can blame them, right?

What hit them the hardest? What do they claim is the biggest factor in their major 21% decline in profits for the fourth quarter? Walmart says it's the cut in food stamps after the temporary increase. Consequently, it has made it difficult for their customers to spend at their stores. Walmart believes if they were to eliminate the impact of the reduction of food stamps, the numbers would have remained the same.

Reference: HuffingtonPost

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Outlets Profit More Than the Average Customer is Led to Believe

Image Credit: rickpilot_2000 @Flickr

The price tags found in outlet stores make it difficult for customers to believe the business could possibly be making money. The truth of the matter is that they really are making a profit. Of course, they have to make or they wouldn't be in business. However, the real shocker is how great the cuts are in order to make profits possible.

How can the items afford to be less than the cost it is being sold for? 

The majority of the store's stock is not the same as the retail stock. They can differentiate in material, details and production quality. Usually the outlets' stock is made up of items made only for the outlets whether or not they openly state it. This can mislead the customer in believing the crazy price tags.

Why are they located so far out from the cities?

It was done so they were able to cut costs and prevent loss in sales at the main retail chains due to the outlets. They later found customers willingly spent more than they usually would due to the effort of traveling a great distant for a good sale.


If you're interested in reading more, view my article here.

Image Credit: rickpilot_2000 @Flickr
No changes were made to the image and is used under the Creative Commons License. 

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