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Wal-Mart Misses, Guides Below Expectations; Blames Weak Consumer Spending, Payroll Tax, Fx And Lack Of Inflation

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http://www.zerohedge.com/news/2013-08-15/wal-mart-misses-guides-below-expectations-blames-weak-consumer-spending-payroll-tax-

"The retail environment remains challenging in the U.S. and our international markets, as customers are cautious in their spending. Net sales in the first six months were below our expectations, so we are updating our forecast for net sales to grow between 2 and 3 percent for the full year versus our previous range of 5 to 6 percent," said Holley. "This revision reflects our view of current global business trends, and significant ongoing headwinds from anticipated currency exchange rate fluctuations."

"Across our International markets, growth in consumer spending is under pressure," said Doug McMillon, Walmart International president and CEO. "Consumers in both mature and emerging markets curbed their spending during the second quarter, and this led to softer than expected sales. While this creates a challenging sales environment, we are the best equipped retailer to address the needs of our customers and help them save money.

During the 13-week period, the Walmart U.S. comp was negatively impacted by lower consumer spending due to the payroll tax increase and lower inflation than expected. Comp traffic decreased 0.5 percent, while average ticket increased 0.2 percent.

"While I'm disappointed in our comp sales decline, I'm encouraged by the improvement in traffic and comp sales as we progressed through the quarter. The 2 percent payroll tax increase continues to impact our customer," said Bill Simon, Walmart U.S. president and CEO. "Furthermore, we also expected an increase in the level of grocery inflation, which did not materialize in a meaningful way. We were pleased that both home and apparel had positive comps.

So Walmart are going to help consumers save money by having higher inflation? Even for corporate spin it's retarded.

So profits won't go up until the US has meaningful inflation which will naturally be the excuse why profits haven't increased because consumer spending has declined as wages are keeping pace with inflation.

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The great industrialists and icons of capitalism knew that they had to pay their workers a decent salary in order that people would have money to afford the products they sold.

Except, of course, that's ********.

Point to where Ford actually said he raised wages so people could buy Ford cars.

Hint: he didn't, because that would have been retarded.

As for Walmart, we have three, but we rarely go there because we'd rather pay a bit more for something that doesn't break in three weeks. Their main selling point is their intermittent stock of region-free Blu-Ray players.

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Except, of course, that's ********.

Point to where Ford actually said he raised wages so people could buy Ford cars.

Hint: he didn't, because that would have been retarded.

As for Walmart, we have three, but we rarely go there because we'd rather pay a bit more for something that doesn't break in three weeks. Their main selling point is their intermittent stock of region-free Blu-Ray players.

Hoover insisted that if wage rates were to be reduced eventually, they must be reduced “no more and no faster than the cost of living had previously fallen, (so that) the burden would not fall primarily on labor.” In short, real wage rates must be prevented from failing. Hoover was insistent that the first shock of the depression must fall on profits and not on wages—precisely the reverse of sound policy, since profits provide the motive power for business activity. At present, then, wage rates should not be reduced at all, and industry should maintain its construction work. Industry should try to keep everyone employed, and any necessary reductions in work should be spread over all employees by reducing the work-week. (Reducing the work-week can only spread unemployment, and prevent that pressureof the unemployed upon wage rates which alone could have restored genuine full employment and equilibrium to the labor market.) If industry followed this course, “great hardship and economic and social difficulties would be avoided.” The industrialists all agreed to carry out the Hoover program, and further organized cooperative efforts on its behalf in a conference in Washington on December 5

The agreement was also announced publicly, and, in addition, the telephone industry, steel industry, and automobile industry pledged to expand their construction programs. The industrialists at the conference pledged not to cut wages, and recommended that all employers in the nation do the same. Henry Ford, in fact, bravely announced a wage increase. Nor was industrial cooperation left on a haphazard basis. Representatives of business were appointed to a temporary advisory committee, along with Secretary of Commerce Lamont. The group, along with representatives of various trade associations, then merged into an Executive Committee headed by Mr. Julius Barnes, chairman of the United States Chamber of Commerce, to coordinate industry collaboration on the Hoover program

America's Great Depression : Murray N. Rothbard

P185

Good enough?

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http://www.thehenryford.org/research/henryFordQuotes.aspx

Henry Ford Quotations

"Profits made out of the distress of the people are always much smaller than profits made out of the most lavish service of the people at the lowest prices that competent management can make possible"
"'The country is ready for the five-day week,' says Mr. Ford. 'It is bound to come through all industry. Without it the country will not be able to absorb its production & stay prosperous. The industry of this country could not long exist if factories generally went back to the ten-hour day, because people would not have the leisure, the desire, or the means to consume the goods produced...Just as the eight-hour day opened our way to prosperity in America, so the five-day week will open our way to still greater prosperity. Of course there is a humanitarian side to the shorter day & the shorter week, but dwelling on that side is likely to lead one astray, for leisure may be put before work instead of after it-where it belongs. Twenty years ago, introducing the eight-hour day generally would have made for poverty & not for wealth. Five years ago, introducing the five day week would have had the same result. The hours of labor are regulated by the organization of work and by nothing else. It is the rise of the great corporation with its ability to use power, to use accurately designed machinery, & generally to lessen the wastes in time, material & human energy that made it possible to bring in the eight hour day. Further progress along the same lines has made it possible to bring in the five day week...It is high time to rid ourselves of the notion that leisure for workmen is either 'lost time' or a class privilege. This is not to say that leisure may not be dangerous. Everything good may also be dangerous-if mishandled. When we put our $5 minimum wage for an eight-hour day into effect in 1913, we had to watch many of our men to see what use they made of their spare time & money. We found a few men taking on extra jobs--some worked the dayshift with us & the night shift in another factory. Some of the men squandered their extra pay. Others banked the surplus money & went on living just as they had lived before. But in a few years all adjusted themselves & our supervision was less needed. There is, of course, a profound difference between leisure & idleness. Nor must we confound leisure with shiftlessness. Our people are perfectly capable of using to good advantage the time that they have off, after work. That has already been demonstrated to us by our experiments during the last several years. We find that the men come back after a two-day holiday so fresh & keen that they are able to put their minds as well as their hands to work. We are not of those who claim to be able to tell people how to use their spare time. We think that, given the chance, people will become more expert in the effective use of their leisure time. & they are being given the chance. The influence of leisure on consumption makes the short day & the short week necessary. The people who consume the bulk of goods are the people who make them...With the decrease of the length of the working day in the United States an increase of production has come because better methods of disposing of men's time have been accompanied by better methods of disposing of their energy. Thus one good has brought another...Of positive industrial value is leisure because it increases consumption. Where people work longest & with least leisure they buy the fewest goods. Businesses the exchange of goods. Goods are bought only as they meet needs. Needs are filled only as they are felt. They make themselves felt largely in leisure hours. The man who worked fifteen & sixteen hours a day desired only a corner to lie in &, now & then, a bit of food. He had no time to cultivate new needs, hence he had only the most primitive. When, in American industry, women were released from the necessity of factory work & became buyers for their families, business began to expand. The American housewife, as household purchasing agent, has both leisure & money, & the former has been just as important as the latter in the development of American business. The five day week simply carries this further. The people who work only five days a week will consume more goods than the people who work six days a week. People who have more leisure must have more clothes. The eat a greater variety of food. They require more transportation facilities. This increased consumption will require greater production an we now have. Instead of business being allowed up because people are 'off work', it will be speeded up because people consume more in their leisure than in their working time. This will lead to more work. & this to more work. & this to more wages. Thus the result of more leisure is the exact opposite of what most people might suppose. Management must keep pace with this new demand--& it will. It is the introduction of power and machinery by manufacturers that has med the shorter day & the shorter week possible. That is a fact which working men must not forget. The eight-hour day was not the ultimate, & neither is the five day week. It is enough, however, to manage what we are equipped to manage and to let the future take care of itself. It will anyway. That is its habit. But probably the next move will come in the direction of shortening the day rather than the week."

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Except, of course, that's ********.

Point to where Ford actually said he raised wages so people could buy Ford cars.

Hint: he didn't, because that would have been retarded.

As for Walmart, we have three, but we rarely go there because we'd rather pay a bit more for something that doesn't break in three weeks. Their main selling point is their intermittent stock of region-free Blu-Ray players.

+1

It made good business sense to pay decent wages as it reduced churn, not so they could buy cars.

In the end, employers get the workforce they deserve.

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+1

It made good business sense to pay decent wages as it reduced churn, not so they could buy cars.

In the end, employers get the workforce they deserve.

http://www.forbes.com/sites/timworstall/2012/03/04/the-story-of-henry-fords-5-a-day-wages-its-not-what-you-think/

At the time, workers could count on about $2.25 per day, for which they worked nine-hour shifts. It was pretty good money in those days, but the toll was too much for many to bear. Ford’s turnover rate was very high. In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.

He certainly had a high churn rate.

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The great industrialists and icons of capitalism knew that they had to pay their workers a decent salary in order that people would have money to afford the products they sold.

Henry Ford - When capitalists cared

Yes, the also minted their own coinage with which they paid their staff, had their own shops in facories and villages and screwed people that way.

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http://www.forbes.co...what-you-think/

He certainly had a high churn rate.

This is why the EU cheap labour is such a boon to employers. Constant supply and they can't easily walk out as they are hundreds of miles from home in many cases the roof over their head in a company HMO depending on it.

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This is why the EU cheap labour is such a boon to employers. Constant supply and they can't easily walk out as they are hundreds of miles from home in many cases the roof over their head in a company HMO depending on it.

Tech companies have been doing the same out in silicon valley for 20 years now. Bring in loads of foreign workers, get them visas and house them. Last thing they want then is to lose their jobs.

I used to drive around San Jose, Milpitas, etc, and you would pass the Korean suburb, the Indian suburb, etc, etc. The even set up shops supplying food stuffs for each particular nationality in each suburb.

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Except, of course, that's ********.

Point to where Ford actually said he raised wages so people could buy Ford cars.

Hint: he didn't, because that would have been retarded.

I didn't say that industrialists (famously, Ford) paid their workers more so that they could specifically buy the products they themselves built :rolleyes:

The employers understood that if workers were generally treated like slaves, there wouldn't be a consumer market out there to manufacture for .. period. It made sense to pay a 'working wage' as it contributed to having a general population that could support a consumer market. The advent of which made pretty much everybody's life better (vs. the alternatives, such as feudalism or indentured servitude).

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Tech companies do the same here and the government think it is OK as apparently theses foriegn workers have special skills that don't exist here ... well not for a few % above NMW plus accommodation ie a room in a house.

I think Wal-Marts greatest achievement is the massive number of jobs they have exported to China

It is very good at killing towns and then moving on.

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