Wal-Mart reported earnings that missed forecasts, saying consumers pocketed tax refunds and savings from cheaper gas. Bobbi Rebell reports.
Wal-Mart reporting weaker-than-expected quarterly sales. The world largest retailer saying consumers were pocketing tax refunds instead of spending the cash on discretionary items. Retail consultant Wendy Liebmann, who heads WSL Strategic, adds they also aren't spending money saved at the gas pump: SOUNDBITE: WENDY LIEBMANN, CEO, WSL STRATEGIC RETAIL (ENGLISH) SAYING: "Wal-Mart has always said publicly that they can reflect their business sales based on gas prices, but the assumption would have been - lower gas prices people come to the store more often. That is not happening as much as they would like." Shares of Wal-Mart fell on the news. Wal-Mart also issued a forecast range for the current quarter that was largely below expectations. But the company is working on turning things around. It is experimenting with an Amazon-like deal. Fifty dollars a year for unlimited deliveries, something Reuters' Jharonne Martis says analysts like: SOUNDBITE: JHARONNE MARTIS, DIRECTOR OF CONSUMER RESEARCH, THOMSON REUTERS (ENGLISH) SAYING: "They are optimistic about the fact that, actually, Wal-Mart is the first retailer to have the guts and step up to the plate and compete, you know, head-to-head to Amazon Prime. So, they're waiting to see what is going to happen, you know, with this competition. Also, the fact that Wal-Mart did partner up with Tango, the app, the messenger app to sell products. Tango has over 300 million subscribers." Wal-Mart has also been upping its efforts to give customers better service, and says that has boosted traffic in its stores.