While pleased with signs of increased traffic throughout the Wal-Mart Stores empire, the company's president and CEO says Americans are under more financial pressure than many retailers realize.
While Wal-Mart sales have long been more influenced by paycheck cycles than other stores, slowing at the end of the month and picking up after the first, "that's been more exaggerated and pronounced in recent months," says Mike Duke, addressing the Goldman Sachs Sixteenth Annual Global Retail Conference in New York on Thursday.
"Most of our stores are open 24 hours, and we've seen an increase in sales just after midnight on the first of the month. And sales of the most basic items, even infant formula, spike on the first and second day of the month. Our customers have been under a real strain, and [are] having to manage very, very carefully."
And while the stresses are greatest on lower-income shoppers, he says in remarks that were also Webcast that this intensification of thriftiness extends to most shoppers, and are more far-reaching than many experts believe.
"This new focus on frugality, and especially on the deferral of purchases for things that aren't needed right now, are the new normal. People are putting a tremendous emphasis on shopping smarter -- I'm amazed at how many more people know the price of what they buy, right down to the penny," he says. "I don't believe this will change as the economy gets better. The deferral of purchases will be with us for a long, long time."
Duke was bullish on the company's performance, particularly in its international divisions, and says that Mexico's same-store sales jumped 6.3% in August, despite that country's economic woes, and that Japan and the U.K. are also performing well.
"I don't spend a lot of time trying to be an economist," Duke says, when asked to predict when consumers might feel more relaxed about discretionary spending. But for the rapidly approaching holiday season, he says Wal-Mart expects that this will be "a late Christmas."
"There will be deferred spending. The customer will use every bit of intelligence, comparison shop, do lots of research on the Internet. At Walmart, we're well-positioned to meet the needs of that customer focus."