There wasn’t much good news for Walmart in its Q3 earnings release last week, as the company reported negative same store sales for the third consecutive quarter, a decrease in customer traffic, and inventory growth that outpaced sales growth. Executives again pinned the blame on “economic headwinds and fiscal uncertainty,” but this time, for good measure, they also threw in some concern trolling about the Affordable Care Act.
Of course the continued feebleness of the economy has affected Walmart’s core customer. But as we have said time and time again, Walmart has brought a not-insignificant proportion of its current struggles on itself by keeping its wagon hitched to a business model that has proven to be seriously broken. As Walmart associates themselves have been telling investors for more than two years, the company has hit the limits of its “productivity loop.”
Walmart is really, really, really hoping for a good holiday season this year, but Q3’s results (and Q2’s and Q1’s, for that matter) don’t bode well, do they?