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Old 03-27-2013, 03:30 PM   #852
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Join Date: Jul 2002
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Default Re: Discussion: The Economy, Fiscal Cliff, National Debt, And Other Financial Issues

There are only so much costs you can cut out before there's nothing left to cut. It's the main way Wal-Mart has been functioning, and I'm not sure why investors hadn't realized this was coming (probably too busy counting their money).

Basically, Wal-Mart has finally reached the point where it can't cut employee pay/hours anymore. In fact, it passed that point, so now the supply/demand equilibrium is above what they are spending, hence a shortage.

So, Wal-Mart has a choice. Increase costs by hiring/paying more. Or continue to lose potential sales.

But they won't self destruct. They'll eventually cave in and start spending. And then they'll be able to play it up for PR when the press starts reporting that Wal-Mart is hiring in a down economy.

In the meantime, it's a good opportunity for other retailers to exploit this weakness.

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