Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.
“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal- Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”
Wal-Mart and discounters such as Family Dollar Stores Inc. are bracing for a rise in the payroll tax to take a bigger bite from the paychecks of shoppers already dealing with elevated unemployment. The world’s largest retailer’s struggles come after executives expected a strong start to February because of the Super Bowl, milder weather and paycheck cycles, according to the minutes of a Feb. 1 officers meeting Bloomberg obtained.
Murray’s comments about February sales follow disappointing results from January, a month that Cameron Geiger, senior vice president of Wal-Mart U.S. Replenishment, said he was relieved to see end, according to a separate internal e-mail obtained by Bloomberg News.
“Have you ever had one of those weeks where your best- prepared plans weren’t good enough to accomplish everything you set out to do?” Geiger asked in a Feb. 1 e-mail to executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”
Yeah, where's their money? Was ending the "payroll tax holiday a terrible mistake?"
I had a longer version of this -- that was eaten by the blogging software, and now I must begin my many Sunday night editing chores. So I'll be back later with an update.
UPDATE: Given the way it's playing out so far, it's certainly valid to criticize Obama for not at least keeping the tax holiday for another year or two, if not permanently (and also Congress...they agreed to this.) On the other hand, a long-term cut in money funding Social Security could be even more painful when (or if) they retire.
The bottom line is that the working class is getting squeezed and squeexed and squeezed. Four years ago, no one was complaining about a 6.2 percent payroll tax. Today, it's a family budget-buster to go back up from 4.2 to 6.2. This is going to need a much bigger fix than adjusting the payroll tax.