Leaked Walmart emails detail sales drop

February 19, 2013 7:53:53 AM PST
Leaked emails from inside Walmart, the biggest retailer in the world, paint a dark picture of sales at the start of this month.

Will the country's economy follow the megastore's tumble?

It's the retail giant, known nationwide for low prices and loyal customers, but in newly leaked emails, one Walmart senior executive asks the questions: "Where are all the customers? And where's their money?" asked Cameron Geiger, senior vice president of Walmart U.S.

In another leaked message between executives, Jerry Murray, Walmart's vice president of finance and logistics grumbles, "February (month to date) sales are a total disaster... the worst start to a month I have seen in my... 7 years with the company."

The executives blamed the 2-percent hike in payroll taxes and a delay in tax returns - one of them calling it a potent "one-two punch."

Walmart customers are an important barometer of the economy - and the emails are sparking concern among investors about the fragile recovery. The store's price-conscious shoppers have been among the hardest hit by the tax hike - a family making $40,000 will have $800 less to spend this year That's the equivalent of eight bags of groceries a year or eight bicycles from Walmart.

Concerns about consumer spending is backed up in the most recent retail sales figures for the country as a whole, which slowed down significantly in January. Walmart sales and earnings have been increasing in recent quarters, and the company released a statement saying the internal emails are not entirely accurate and lack proper context.

Economists say it's too early to tell if the tax hikes are going to cause a sustained slowdown in spending or if consumers just need some time to adjust to the new hikes. Don't forget the added consumer headache of rising gas prices, too; 32 days of gains.


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