Best of the Week
Most Popular
1. Trumponomics Stock Market 2018 - The Manchurian President (1/2) - Nadeem_Walayat
2.Yield Curve Inversion a Remarkably Accurate Warning Indicator For Economic & Market Peril - Dan_Amerman
3.China is Now Officially at War With the US and Japan - Graham_Summers
4.Markets Pay Attention Moment - China’s Bubble Economy Ripe for Bursting - 16th Jul 18 - Plunger
5.Stock Market Longer-Term Charts Show Incredible Potential - Chris_Vermeulen
6.U.S. Stock Market Cycles Update - Jim_Curry
7.Another Stock Market Drop Next Week? - Brad_Gudgeon
8.The Death of the US Real Estate Dream - Harry_Dent
9.Gold Market Signal vs. Noise - Jordan_Roy_Byrne
10.The Fonzie–Ponzi Theory of Government Debt: An Update - F_F_Wiley
Last 7 days
What the Copper and Gold Crash Means for Commodities and Stocks - 20th Aug 18
Stock Market Challenging Recent High - 19th Aug 18
Venezuela's Great Bolivar Scam, Nothing but a Face Lift - 19th Aug 18
Heavy Truck Sales Sending a Bullish Sign for Stock Market - 19th Aug 18
Why Oil Prices Fell -- Stockpiles or Price Pattern? - 18th Aug 18
Why The Uranium Price Must Go Up - 18th Aug 18
Land Rover Discovery Sport 90% Motorway Driving MPG Fuel Economy in ECO Mode - 18th Aug 18
GDX Gold Mining Stocks Q2’18 Fundamentals - 18th Aug 18
SPX Losing Gains - 17th Aug 18
What Gold Is Not - 17th Aug 18
Dollargeddon - Gold Price to Soar Above $6,000 - 16th Aug 18
Stock Market Higher Again, Correction Over? - 16th Aug 18
Up Your Forex Trading Game - 16th Aug 18
Large Caps Underperformance vs. Small Caps is Bullish for Stocks - 16th Aug 18
“The Big Grab” - Failing Pension and Retirement System - 16th Aug 18
How US Indo-Pacific Vision Forgot Asian Development - 16th Aug 18
Impulse Moves in the Currencies - 15th Aug 19
Best Merlin UK Theme Park Summer Holiday 2018 - Thorpe, Alton Towers, LegoLand or Chessington? - 15th Aug 18
The Essence of Writing an Essay that Must be Understood - 15th Aug 19
Is Solar Energy Rising From The Ashes Again? - 15th Aug 18
A Bullish Bond Argument That Hides in Plain Sight - 15th Aug 18
Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - 15th Aug 19
A Depressed Economy And A Silver Boom - 15th Aug 19
Moving Averages Help You Define Market Trend – Here’s How - 14th Aug 18
It's Time for A New Economic Strategy in Turkey - 14th Aug 18
Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - 14th Aug 18
Dow Stock Market Trend Forecast 2018 - Video - 13th Aug 18
Stock Market Downtrend to Continue? - 13th Aug 18
More Signs That the Stock Market Will Rally Until 2019 - 13th Aug 18
New Stock Market Correction Underway - 13th Aug 18
Talk Cold Turkey Economic Crisis - 13th Aug 18
Which UK Best Theme Park - Alton Towers vs Thorpe Park vs Lego Land vs Chessington World - 12th Aug 18
USD is Rising. What this Means for Currencies and Stocks - 12th Aug 18
Hardest US Housing Market Places to Live - Look Out Middle Class - 12th Aug 18
America’s Suburbs Are Making a Comeback - 12th Aug 18
Stock Market US Presidential Cycle, Seasonal Analysis and Economy - Video - 12th Aug 18

Market Oracle FREE Newsletter

Trading Any Market

Woe-Mart: The Retail Giant Walmart Has Faltered

Companies / Retail Sector Apr 19, 2016 - 03:48 PM GMT

By: EWI

Companies


The era of "always low prices" no longer translates into always high profits. Learn what we think is behind the shift

Walmart founder Sam Walton said:

"There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else."

Never were those words felt more acutely for those on the Walmart payroll than right now. Reason being: Over the last year, the eponymous Walmart "customer" has, indeed, taken his business elsewhere, fueling a series of epic setbacks for the retail giant:

  • Store closures, layoffs, and the shuttering of its entire fleet of smaller "Express" locations across the U.S.
  • A near 40% decline in its stock (WMT) before hitting bottom in November 2015
  • Losing its status as the world's #1 retailer to Amazon
  • And -- the sour cherry on top: The first decline in annual revenue since Walmart went public 45 years ago

In the words of a March 31 Bloomberg: It's "the end of an era for Walmart."

Which leaves one question: How the heck does a big-box behemoth go from retail victor to re-fail victim?

Well, according to the mainstream experts, the main cause of Walmart's woes are many-fold, from falling oil prices - to - China's flailing economy - to - the extinction of the brick-and-mortar store - to - the biggest baddest culprit of all, the brawny greenback:

"Walmart profits hit by strong dollar" (CNN Money)

Economists can always be counted on for providing endless explanations as to why a corporate king gets dethroned -- after the fact.

But in our opinion, one's time and energy is better served anticipating those turns. Which is exactly what our analysts did in regard to Walmart's reversal of fortune -- starting with our September 2013 Elliott Wave Financial Forecast's bearish call for Walmart stock:

"We'll stick with our contention that the economy is turning toward a deflationary depression. This long-term chart of Walmart is another under-the-radar clue to the unfolding debacle.

"It shows the world's largest retailer completing a five-wave rally that dates back to the early 1980s. As consumers go on a buying strike over the next few years, Walmart's stock should fall by at least 50%."

From there, Walmart made one more new high at $90.97, after which the anticipated downside drama arrived in full force, with shares plunging 37% to end at a four-year low in November 2015.

Which brings us to the larger issue at hand: Walmart's struggle to convert "always low prices" into always higher profits goes hand in hand with the underlying trend in the U.S. economy: that of deflation.


What You Need to Know Now About Protecting Yourself from Deflation

What You Need to Know NOW About Protecting Yourself from Deflation

In this free Special Report, you will learn about this unexpected but imminent risk to your portfolio AND you'll get 29 specific forecasts for stocks, real estate, gold, cultural trends -- and more (excerpted from Prechter's New York Times bestseller Conquer the Crash -- You Can Survive and Prosper in a Deflationary Depression).

Download your free report now >>

This article was syndicated by Elliott Wave International and was originally published under the headline Woe-Mart: The Retail Giant Walmart Has Faltered. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

About the Publisher, Elliott Wave International
Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world's largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules