Walmart just signaled a terrifying new reality for American retail

Thursday, February 18, 2016
By Paul Martin

Kate Taylor
BusinessInsider.com
Feb. 18, 2016

Walmart is not expecting any significant sales growth in the coming year, and that’s bad news for the retail industry as a whole.

In October, the retail giant said that net sales would grow 3% to 4% every year for the next three years. However, in its fourth-quarter earnings results on Thursday, Walmart had a less optimistic prediction for fiscal 2017 (calendar year 2016).

“Including store closures and the impact of the strengthening U.S. dollar, we now expect net sales growth to be relatively flat in fiscal year 2017,” Walmart CFO Brett Biggs said in the company’s earnings call.

Walmart closed 269 stores in late January, laying off thousands of employees.

For retail rivals, Walmart’s struggles are not cause for celebration. Instead, they reveal a swiftly changing retail landscape where few can keep up.

“The blunt truth is that while stores remain a vital part of the retail mix, they are not quite as relevant as they used to be,” Conlumino CEO Neil Saunders wrote in a research note about the company’s recent store closures. “Walmart’s decision is part of a larger shift that will be played out across all parts of the retail sector over the coming year and beyond.”

Department-store giant Macy’s also revealed it would close 40 stores in early 2016. These two major retailers’ decisions to shut hundreds of stores are not anomalies in the industry.

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