What's going on?

Wal-Mart nailed it again! It made more money than expected, sales at its US stores had their best quarterly rise in two years and it increased its expectations for future profit.

What does this mean?

For one, online sales jumped 11% – significantly more than the 7% increase seen in the previous quarter. That�s good news given the lurking threat of Amazon. But it wasn�t just e-commerce that drove Wal-Mart�s improved performance: better good, ole� fashioned in-store execution (e.g. cleaner stores and better inventory management) helped improve traffic and sales at its US stores. The turnaround that its CEO outlined late last year appears to be getting traction – and a 25% rise in the share price over the past nine months is reflective of that!

Why should I care?

The bigger picture: Wal-Mart benefited from some consumer tailwinds.
Lower gas prices, increased worker pay and improved employment all made for a healthier consumer � which helped boost Wal-Mart�s sales (e.g. higher minimum wages in various jurisdictions probably led to more spending at Wal-Mart). This shows how the health of the American consumer can feed through to retailers.


For you personally: Fresh meat and dairy is getting less expensive.
Yes, it�s getting cheaper for you to buy dinner at the grocery store (at least, for items like meat, chicken and eggs). In fact, Wal-Mart�s results were negatively impacted by food price deflation (this was also true for other grocery retailers and for Wal-Mart�s UK subsidiary Asda). Lower prices for the raw meat have a lot to do with it. So you might be staying home for the odd meal a little more often� (rising wages, among other things, are keeping restaurant bills from falling).