Gary, I do not see the increase consumer spending at WMT as an inlationary pressure. In fact, I have just the opposite opinion.
I don't want to get too deep into this topic, but I will try to explain my reason very briefly. I have observed a substantial change in the way people live in this country since I moved here 17 years ago. During my first years, I was amazed how people wasted resources, spent their money as if there is no tomorrow (well, this is an exaggeration but it is close. I wached people buy things that they did not need, or did not exactly care). I do believe that there has been a change for the better over the past five to eight years. Cuts and layoffs made people to think about their future, and I believe people became more financially responsible. They have started investing for their future, and are paying more attention to live within their financial limits. Heck, even the goverments realized that they can't keep spending the money that they did not have.
I see the reason for increased consumer spending at WMT not as inflationary, because in my opinion, they (WMT) are simply steeling the markey from the other similar stores. I have a fairly decent income, but doing my groceries once a week at WMT saves me as much as 30% compared to the local Kroger store even though I have to drive 6 miles to WMT instead of 2 for the local grocery. The local Kroger is slowly becoming a giant convenience store that people are buying two three items that they need in a hury. I do not see those heavily loaded shoping carts lined up in the checkout counters at Kroget anymore.
Good luck. |
