Honey, pass the Puppy Chow and hand me the remote.
In a time of economic woes, Wal-Mart has posted earnings that are up 6.9%. While many folks are struggling to make their house payments, where's the profit coming from? Oddly enough, it's the economic problems that are driving the sales. When times are tough, the tough go shopping! Seriously. As times get tougher, discount stores see increased sales, and Wal-Mart is certainly the most popular discount store that folks are flocking to. What's even more surprising is what they're spending their limited funds on.
During a period when people are ditching their cars and dusting off their bikes to get to work because gas prices are so high, Wal-Mart is posting an increase in earnings. The profits are attributed to sales in electronics, mainly in flat-panel TV sales. Can't afford to drive to work or eat, so let's drive to Wal-Mart and buy a big screen! Business Week reported that Wal-Mart posted triple-digit increases, out-selling the other main electronics retailers.
Wal-Mart targeted the electronics field recently by aggressively lowering the price of 42-inch HDTVs, drastically affecting sales in other stores, and bringing in higher-end consumers who previously never shopped at the retailer. Business Week attributes the collapse of Tweeter and Harvey Electronics to this move. Wal-Mart owns 16% of the flat-panel market, and a research study determined that 28% of people looking for TVs will check out the selection at Wal-Mart. Although Best Buy and Circuit City are also posting good numbers in the flat-panel arena, Wal-Mart is clearly kicking some retail booty.—Leslie Shapiro
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