Shop Talk

Retailers, consumers and prices

Check Out Line: “Insult to injury” for retailers

May 11, 2009

CANADA/Check Out one analyst’s list of retail names at risk.

Around this time last year, stimulus checks amounting to more than $100 billion started landing in cash-strapped consumers’ bank accounts, giving them a chance to spend and boosting sales for many retailers.

But this year’s stimulus entails lower withholding taxes and not ”hard checks,” which means “the effects of this year’s stimulus on retailers will be a far cry from 2008,” Pali Capital analyst Stacey Widlitz said in a research note to clients.

As retailers already face thrifty consumers, tough comparisons versus a year ago could put some retailers at risk this time around, adding “insult to injury,” she said.

For example, electronics retailer RadioShack offered consumers a 10 percent discount on purchases over $50 when a stimulus check was used between May 4 and July 12 last year.  That along with sales of TV converter boxes helped sales, Widlitz said.  

“Beware of tough comps ahead, lack of stimulus promotions and the end of converter boxes in June,” she said in the note.

Widlitz also mentioned discounting giant Wal-Mart Stores, saying the retailer benefited last year from stimulus checks, and ”on top of increasing expectations, investors are not fully factoring in the headwind for May-June.”

Other companies mentioned include Best Buy, closeout retailer Big Lots, and grocery store chains such as Supervalu, Safeway and Kroger.

Also in the basket:

Energizer to buy SC Johnson shaving cream business

Ackman to tout Target slate at town hall meeting

Benetton Q1 net profit, revenue fall

Nordstrom withdraws from CityNorth project (WWD, subscription required)

(Reuters photo)


sounds like a lot of wishful thinking and not a lot of businness savy


Well, lets all feel sorry for the worlds largest retail corporations. Wal-mart made $12.73 BILLION in profit last year. Wal-marts forecast for earnings in 2009, is predicting an increase in profit. Buy, buy, buy is not an answer to our financial problems. Wal-mart doesn’t get a stimulus check from us this year, oh, such insult, such injury.

Posted by Forest | Report as abusive

Well, i guess wal-mart will have to decrease their employees benefits. Wait, oh yeah i forgot, they did that like 10 years ago. Looks like wal-mart will outsource their cashiers to india to save money.


Rather than individual consumers shopping at WalMart, wouldn’t it be easier for everyone concerned if the US Treasury sent money directly to the Chinese government, gave Walmart their cut, and we sent all the lead and melamine we received in return directly into a secure landfill?

Posted by Bill S. | Report as abusive

Forest: Wal-Mart already gets tons of governmental subsidies in the form of tax breaks and incentives. There’s a documentary that talks about not only that but also the horrible practices they employ that remind me of Nazi-era Germany when you’re on the clock and under their thumb.

Posted by Jessidork | Report as abusive

There was a study that was released somewhere around 10 to 11 months ago that showed that Wal-Mart could only sustain another 50% inflation, it was pretty hush hush and got about 5 seconds of off beat notoriety… While I initially feel triumph at the thought of the evil giant falling, economically if a machine like Wal-Mart is staring down that barrel, others… well, retailers employee a lot of people even if it is not under the most favorable of conditions. Now take that study and the fact that we are practically begging China to dump a vast quantity of its surplus capital because their currency is to valuable, and you might start scratching your head and wondering how deep this rabbit hole goes! My only real complaint is that I wish that people would finally learn that the easy way out is never the right way out… the old adage, the easy man killed him self at work.
On a side note, if you really get interested in this stuff, you should look at what was being played out by OPEC and the ridiculous gas prices… and Hugo Chavez supplying ridiculously cheap oil to China along with the timings of the Bush administrations lashings of him, you can dig up some pretty interesting ‘coincidences.’ I guess it is hard for one puppeteer to put on the whole dumb show.

Posted by David | Report as abusive

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see