Wherever Macy's (NYSE:M) shoppers have gone, it's not to Walmart (NYSE:WMT). The world's largest retailer said on Thursday (Aug. 15) that U.S. same-store sales are down 0.3 percent, one day after Macy's said its comp sales were down 0.8 percent.
For Walmart, that's an improvement over the 1.4 percent same-store decline it reported three months ago, but the chain is still losing ground. Some of those Walmart customers may have gone to Sam's Club, where same-store sales were up 1.7 percent from a year ago. But combined, sales are flat.
What sold and what didn't? Clothing sold—Walmart is now focusing on basics like socks and low-end jeans. Sporting goods and toys sank, along with consumer electronics. Even grocery sales dropped slightly, in part because shoppers bought cheaper versions of packaged or fresh foods. And back-to-school, where Walmart has invested heavily online with special supply-list and school-uniform websites? Too soon to tell, the chain said.
Like Macy's, Walmart slashed its expected full-year sales growth—in Walmart's case by more than half. And with Walmart garnering almost 10 percent of U.S. retail spending, that's a bad sign for everyone in retail.
It's especially troubling because there's no good evidence that either Walmart or Macy's shoppers are actually going anywhere else. The conventional assumption that the entire customer economy shifts downward, so Macy's customers go to Target, Target's customers go to Walmart, and Walmart's customers go to Dollar Tree, doesn't seem to be holding up. No major retailer appears to be benefiting big-time from a shift, even though the Federal Reserve says retail sales have been on the upswing since April. Whichever retailer finds those customers first is going to be very happy.
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