An outdoors sign for Walmart is seen in Duarte, Calif. Tuesday, May 28, 2013. Wal-Mart Stores Inc. pleaded guilty on Tuesday to charges the company dumped hazardous waste in Calif. Wal-Mart entered the plea in federal court in San Francisco to misdemeanor counts of negligently dumping pollutants from Walmart stores into sanitation drains across California, a company spokeswoman said. (AP Photo/Damian Dovarganes) | ASSOCIATED PRESS
Thanks to the federal government’s relentless push to cut spending, Walmart’s shoppers are hurting and so is the retailing giant.
The company announced on Thursday that it expects relatively weak sales at the end of the year, as its shoppers, struggling under a range of cuts in government programs and benefits are having trouble making ends meet.
“We know the customer continues to be challenged by ongoing uncertainty around health care costs, the payroll tax increase and recent SNAP [food stamp] reductions,” Walmart U.S. CEO Bill Simon said on a recording announcing the company’s third quarter earnings.
Wal-Mart’s reduced outlook comes as the company reported a 2.8 percent increase in its third-quarter profit, but saw a revenue shortfall. Its shares slipped in premarket trading Thursday.
Walmart counts on the money it takes in from food stamps. The company nets about 18 percent of all food stamp dollars. Congress slashed food stamp benefits earlier this month, a move that could hurt Walmart and other retailers.
Simon’s comments on Thursday seemed to conflict with remarks he made earlier this year claiming that the retailer might actually benefit from the food stamp reduction because when shoppers become more concerned about price, Walmart becomes more relevant.
Walmart shoppers are also reeling from an increase in the payroll tax and the government shutdown that dinged their confidence, company officials said on the call.
Read the rest of the story here.