Wal-Mart Stores, with its less affluent, more rural customer base, came up short yesterday when it and Target both released results for the first quarter. Target - with customers a little richer and more chic - posted a better-than-expected profit, while Wal-Mart reported its lowest sales growth in more than two years. ...

High gas prices reduced the number of trips consumers made to the Wal-Mart Supercenter, analysts agreed, and other rising household costs cut into the money the average shopper had to spend on nonessentials once there. Target's more upscale customers continued to spend. ...

Wal-Mart spokesman Marty Heires ... blamed economics for the results. "As we've commented in the past, our customers live paycheck to paycheck and they are pretty sensitive to costs," he said. "They've told us gas is a burden, and cuts into their discretionary spending."

But more than gas prices hurt Wal-Mart, analysts said. After a fine February, the company hired extra employees. "Their labor costs were too high," [an analyst for Smith-Barney] said. "That's what singed them in April."

Tracie Rozhon, "Wal-Mart Lags but Target Hits Its Sales Goal"

Meanwhile, from the wilds of the op-ed page, Paul Krugman offers a bit of missing perspective:

Today, Wal-Mart is America's largest corporation. Like G.M. in its prime, it has become a widely emulated business icon. But there the resemblance ends.

The average full-time Wal-Mart employee is paid only about $17,000 a year. The company's health care plan covers fewer than half of its workers.

True, not everyone is badly paid. In 1968, the head of General Motors received about $4 million in today's dollars - and that was considered extravagant. But last year Scott Lee Jr., Wal-Mart's chief executive, was paid $17.5 million. That is, every two weeks Mr. Lee was paid about as much as his average employee will earn in a lifetime.

Not the sort of information, of course, relevant to a business discussion.

More irrelevant perspective available from eRobin at Fact-esque, who along with Mick Arran at Dispatch from the Trenches has been doing a consistently bang-up job looking at the Wal-Mart economy. Bookmark them both.

*Follow-on: eRobin, commenting on this, mentions the irony that "as soon as the going gets tough for WalMart, they play the class war card." Which is actually in the vein of what I wanted to point out yesterday, without quite having the time/attention span to do it. The thing that's so wrong and obtuse and confused about the kind of "business" reporting the Times is doing here is its easy—not to mention bizarre—reliance on a class narrative, in which these massive corporate retailers don't simply target themselves to particular market-demographic segments, they actually come to represent the class condition of the people they sell to. (A narrative, as eRobin notes, that Wal-Mart works hard and successfully to sell. And a testament to how utterly impoverished the American discourse of class is.) As if the fact that Wal-Mart forces whole communities into a kind of vicious-circle, race-to-the-bottom form of wage peonage were irrelevant to the discussion: Wal-Mart makes customers of the little guys (that it immiserates), and that means that it's somehow of their party.

Literally the case here, where it's a Wal-Mart spokesman who's given the opportunity to speak to the concerns of "our customers" and their "[Wal-Mart-limited] paycheck to [Wal-Mart-limited] paycheck" state of existence. (Like the plantation owner who knows just what "his Negroes" really need, and no outsiders wanted, thank you very much.) It's such an ordinary feature of business reporting that you hardly notice it, but in this case, and thanks to the juxtaposition with Krugman's column, it strikes me with especially ugly force.

posted by michael  11:41:15 AM  
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