Why Walmart Still Matters

24/7 Wall St.

Often forgotten among the publicity Amazon.com Inc. (AMZN) gets for its red-hot growth, and the well-regarded marketing and pricing strategies of Costco Wholesale Corp. (COST), is the size of Wal-Mart Stores Inc. (WMT) and its presence as a primary marker of the health and well-being of America's lower and middle classes.

Walmart, which announces earnings later this week, employees roughly one million people in the United States, against a national figure for employed Americans of 142 million. Its sales in the United States are nearly $300 billion a year, while Amazon's run well below its corporate total of $80 billion a year and Costco at less than $100 billion.

Ten Brands That Will Disappear in 2014

Walmart's threat to Amazon should not be underestimated. In June, it had 40 million unique visitors, slightly more than Twitter, according to comScore. Amazon had 98 million, a huge lead, but not one that makes Walmart's figure insignificant. Walmart continues to press for its customers to shop more online. Although this has only worked in fits and starts, Walmart has both the leverage of its brands and a management desperate to do almost anything to ding Amazon's success online.

America's Worst Companies to Work For

Because of Walmart's low-priced inventory and products with downscale appeal, which include a quasi banking system, $4 prescriptions and a huge line of no-contract phones, the company is nearly a perfect measure of the economic health of people who earn less than the national average household income of just above $50,000 (almost 57% of Walmart customers fall below the level, according to Ad Age). This is particularly true among the population in suburban and rural areas, where Walmart may be among the few options relatively close to home for people to buy department store inventory and consumer electronics.

The Most Dangerous Cities in America

If the theory is true that Americans with modest incomes or less are a strong barometer of the economic recovery, then Walmart earnings means a great deal as a marker for the recovery. If people in the lower and working classes tend to represent the tail end of the recovery in terms of unemployment and the ability to earn a living wage, then Walmart earnings mean a great deal as a measure of a very large portion of the population. Walmart earnings are more than just the earnings of a mammoth corporation.

The Most Corrupt Countries in the World

Related Articles

Rates

View Comments (24)