Mike Duke, new CEO of Wal-Mart, appeared on the Today show this morning and some coverage of his comments might indicate he is predicting a prolonged economic downturn and weakening retail trends.
But that's not what he said. His response, when asked by Today Show host Matt Lauer whether he thought the economic worst was over, was cautious rather than predictive. He said:
Actually, I think, Matt, we all want to be hopeful. We're all looking for a better day when we come out of this. I will tell you, though, in talking to our customers all across the country, I think there is still a lot of stress. I think with the job security challenges, the unemployment where it is. So, this may be a trailing impact. Maybe there is some period of time from seeing the first data points to actually translating to the 140 million Wal-Mart customers around the country actually feeling it as they come into our stores.
Frequently cut off by Lauer before he could complete his thoughts on the economic ramifications of various Wal-Mart sales trends, Duke did say:
I don't see us coming out of this recession as a V recession where we will just bounce out and come back. This is one that is going to take a sustained change in the way that families live and their focus. Even in food, whereas in some cases more expensive cuts of meat have been down, and when some of that starts to come back then there will be--
Lauer cut him off at that point.
Some reports have jumped on the V recession comment to suggest it's Wal-Mart's view that the recession will linger, but what Duke seems to be saying -- and Wal-Mart didn't return a call seeking clarification of his remarks -- was that any economic recovery will need to take firm hold before the company's customers, established or new in the recession, are going to return to their normal way of living and shopping, and that process will take awhile.
Duke's remarks, as some have reported them, seem colored by recent data that has retail sales performing poorly in March, which, as this blog has argued, was likely influenced by the under-appreciated shift in Easter from late in that month to mid April.
So, has retail fizzled? Are Duke's comments a conservatively phrased warning that has far-ranging implication or just a cautious appraisal of what's happening to Wal-Mart? The latter seems more likely. Rather than scrutinizing Duke's remarks, a more informed method of determining what is happening in retail will be to look at April results. If they bounce back and perform in line with January and February, then it would be fair to say that retail is on the upswing. If they don't, then it would be reasonable to say the early year retail results were an aberration and no indication of an improving economy.
Wal-Mart CEO's Today Show Comments More Cautious Than Cautionary
/ MoneyWatch
Mike Duke, new CEO of Wal-Mart, appeared on the Today show this morning and some coverage of his comments might indicate he is predicting a prolonged economic downturn and weakening retail trends.
But that's not what he said. His response, when asked by Today Show host Matt Lauer whether he thought the economic worst was over, was cautious rather than predictive. He said:
Frequently cut off by Lauer before he could complete his thoughts on the economic ramifications of various Wal-Mart sales trends, Duke did say: Lauer cut him off at that point.Some reports have jumped on the V recession comment to suggest it's Wal-Mart's view that the recession will linger, but what Duke seems to be saying -- and Wal-Mart didn't return a call seeking clarification of his remarks -- was that any economic recovery will need to take firm hold before the company's customers, established or new in the recession, are going to return to their normal way of living and shopping, and that process will take awhile.
Duke's remarks, as some have reported them, seem colored by recent data that has retail sales performing poorly in March, which, as this blog has argued, was likely influenced by the under-appreciated shift in Easter from late in that month to mid April.
So, has retail fizzled? Are Duke's comments a conservatively phrased warning that has far-ranging implication or just a cautious appraisal of what's happening to Wal-Mart? The latter seems more likely. Rather than scrutinizing Duke's remarks, a more informed method of determining what is happening in retail will be to look at April results. If they bounce back and perform in line with January and February, then it would be fair to say that retail is on the upswing. If they don't, then it would be reasonable to say the early year retail results were an aberration and no indication of an improving economy.