In every industry there is a market leader, some have near monopoly positions, but there is market leader in setting of prices, revenue, profits and we all generally look at that company to see how well they are doing. If they are doing well, then we can say that industry they cater to is doing good. If they are struggling then you look to the competitors to see how they are doing and make a decision on how that segment is doing.

In the retailing world, Walmart is the clear leader and since 2/3s of the economy of the US is related to retailing, Walmart’s results give a clear indication of how the economy is doing.

In an article by Anne D’innocenzio of the New York Times News Service, Walmart posted the slowest sales growth in 6 years as consumers in the US tightened their wallets.

Comparable sales at Walmart store rose 2.6%, the slowest growth in 6 years. The company’s stock fell on the news. The company had been doing very good because cost-conscious shoppers were flocking into the stores.

America’s biggest retailers said that consumers had been wary with their spending and keen to get value from every dollar spent, even if household balance sheets seemed healthy.

In the US, the Treasury Department has sent tariff refunds back to the importers. Walmart received $2.9 billion. Originally, Walmart was going to use most of it to improve stores or internally, now Walmart has lowered the prices of 11,000 items with the intent of making those reductions permanent when possible. John Furner, the CEO said we are investing in price because customers need us to.

Linking to dividend paying stocks, as a dividend investor you like big companies and generally you can make a good income buying them. They are big for a reason, they keep costs down, margins up and are profitable. However all companies have to deal with the economic cycle and where we are in it.

There are more questions than answers, till the next time – to raising questions.