Wal-Mart sees global price deflation continuing

Wal-mart left.jpgThe blog regards Wal-Mart and other major retailers as excellent leading indicators of trends in the wider economy.

It was therefore concerned to see CFO Tom Schoewe reporting today that Wal-Mart continues to “operate in a very challenging economy“, where the key driver is to provide “the lowest prices to our customers around the world.”

US CEO, Eduardo Castro-Wright, added that US same-store sales were actually down 0.4% versus 2008. He said the decline was “driven by price deflation that was well beyond what we had expected, across many food categories, as well as electronics.”

This deflation is occurring at a time when oil prices have doubled since the start of the year. It suggests that chemical companies and polymer convertors will have a tough task pushing through price increases, especially as Wal-Mart expect price deflation to continue into Q1.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. Paul is also an invited member of the World Economic Forum’s Global Agenda Council. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such as oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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