Wal-Mart says consumers under “more pressure”

Petrol pump.jpgThe major retail groups are excellent indicators of future trends in chemical consumption.

Since before the Crisis began, consumers have been focusing more on price and value-for money. Now Wal-Mart is reporting that consumers face “more pressure than a year ago“.

This suggests that demand destruction is already well underway. And Wal-Mart CEO Mike Duke notes they are seeing:

• More shopping at the start of the month, after paychecks arrive
• More use of online comparison shopping, to identify low prices
• Food price inflation is having a major impact
• However, consumer electronics sales are benefiting from lower prices

Duke added that higher fuel costs are a major factor.

The problem is that average US gasoline prices are already close to their all-time high in 2008 of $4.16/gal, even though crude oil is still $35/bbl below its peak. This is because of lower refinery operating rates. Duke noted these high prices “are really having an impact on the consumer“.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. 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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