This is what a rising poverty level looks like. Bill Simon (Head of Wal-Mart operations) says more Americans paying necessary goods with government assistance. The desperation in the U.S. consumer can be seen in their current buying behaviors.
The paycheck cycle we’ve talked about before remains extreme.
And you need not go further than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs, and continue to shop and mill about the store until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.
And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. Otherwise, we are open 24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason. And we have to look at that and we have to watch that and we have a commitment to serve those customers who need that. And we are very, very focused on that.
I think this says a lot about the tepid U.S. economic recovery (or lack thereof). You can download a full transcript of the the talk Simon gave at the Goldman Sachs Retail Conference last week.