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Thursday, March 30, 2023
BIDENOMICS - EVEN THE POOR CANNOT AFFORD WALMART - Walmart Reports A Large Number Of Store Closings As Catastrophic Retail Collapse Intensify
Walmart Reports A Large Number Of Store Closings As Catastrophic Retail Collapse Intensify
A large number of Walmart stores are set to close down permanently next month as conditions continue to deteriorate for U.S. grocers. The biggest retailer in the world hasn’t been immune from the devastating effects of the retail apocalypse, and now several locations that have served their communities for years are about to disappear. Believe it or not, the top retail chain is reporting lagging sales growth and a myriad of challenges that include wage and consumer inflation and declining demand. The outlook is very grim, and many other big U.S. grocery chains are following Walmart’s move and shuttering multiple locations to survive the perfect storm that has already begun.
According to The U.S. Sun, over a hundred locations are on the chopping block due to “poor sales performance”. On top of that, the retail giant has decided to put an end to its nine-year experiment with pick-up-only locations and confirmed it would lay off thousands of workers at its e-commerce fulfillment centers across the country.Moreover, in a recent interview with Fox News, the former Walmart CEO pointed to several reasons why the company was struggling and warned Americans about the “detrimental impact that mass layoffs could have on the U.S.'s feeble economy.”
"It's crazy right now. We're stuck in this loop of wage inflation, product inflation, and cost inflation. And it's just that cycle keeps going. And I think, unfortunately, an inevitable byproduct of some of the Fed's moves during the pandemic,” said Bill Simon, who left his position as Walmart’s chief executive officer in 2014. Walmart has already informed investors that it expects sales growth to significantly slow down, especially in the second half of this year. On Tuesday, Walmart forecasted net sales growth of 2.5% for the current fiscal year, well below Wall Street’s prediction for a 3.3% increase. It expects adjusted earnings in a range between $5.90 per share for 2024, missing analysts’ forecast of $6.50.
Refinitiv data shows that this would mark the weakest sales growth for the retailer since its 2010 fiscal year, and the first drop in annual earnings since fiscal 2009. But Walmart is far from the only large retailer that is facing closure as sales decline. As a perfect storm of events hits food supply chains, several grocery stores nationwide are also shutting down. A new report by Best Life reveals that dozens of Winn-Dixie stores are closing right now. A spokesperson for Southeastern Grocers Inc., Winn-Dixie's parent company, called the decision to close "difficult." "While we understand that closing stores will impact local communities, we want to assure you this decision was not made lightly," the spokesperson said.
Moreover, so far this year 6 Lucky supermarkets have been shuttered. And another one is on the chopping block this month after 40 years in business. In February, Green Zebra, a grocery chain that earned the love of loyal customers all across Portland, Oregon went bankrupt. The niche grocery market was known for its healthier meals, but unfortunately, the chain went under and is now closing all of its current locations. The goodbye occurs after 10 years in business.
The shutdown of so many stores is not only affecting the bottom lines of businesses but also leading to a surge in unemployment and higher prices, making it increasingly difficult for consumers to afford the basic necessities of life. Local communities are also feeling the impact, as empty storefronts and vacant malls have become the new norm. We must wake up to the fact that the retail apocalypse is not just a temporary setback but a long-term crisis that requires immediate action.
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THE NIGHTMARE BEGINS IN JULY!? FINANCIAL CRISIS 2.0, PAYCHECK TO PAYCHECK CROWD
A decent, safe, and affordable home is something all Americans need to thrive. For decades, low-income families have struggled to have access to affordable rental homes, but now this is a huge problem for the middle class, too. Millions of middle-income earners can’t afford rent in major U.S. cities due to the steep rise in prices recorded since the pandemic. Without significant pay raises or government assistance, these middle-class households are being shut out from typical middle-class neighborhoods, and this is triggering a chain reaction that leads to systemic poverty and lingering inequality. In other words, housing costs are squeezing the life out of middle-class Americans.
The typical home now costs about $80,000 more than it did just two years ago, and the average rent in the U.S. is over $1,000 more expensive than in 2020. Rents are climbing an average of 3.5% annually, the study found, while middle-class renters’ incomes have declined 9% over the past decade. In most metropolitan areas across the country, the American middle class has been spending far more on housing than they can afford, researchers found. The study highlights that 21.2% of middle-class homeowners and 46.3% of middle-class renters in the United States are either moderately or severely burdened by housing costs — defined as spending more than 30% or more than 50% of their income on housing, respectively.
"Ultimately, we're in a rental affordability crisis," noted Whitney Airgood-Obrycki, a research associate with the Harvard Joint Center for Housing Studies. Believe it or not, 15 years ago, more than two-thirds of people who rented an apartment or a single-family home in the U.S. earned less than $30,000 a year, the study shows.
Every year that passes by, it gets even harder for middle-class renters who cannot qualify for subsidized housing to find affordable apartments on the market. Renters need to earn $21.21 an hour to afford a modest, two-bedroom apartment in the U.S., according to the National Low Income Housing Council, significantly more than the average national hourly wage of $16.38. This is why 51% of renters in the middle class are unable to afford a place to live in most U.S. cities.
The savings that used to be associated with the middle class have dried up in the past few years, as wage growth stagnated. Not only does this make it harder for people to stay in the middle class, but it makes coming up with high sums to rent or buy city apartments impossible. “If there aren’t enough cheaper options, it becomes a chain, with a middle-class person living in an apartment a lower-income person might have occupied, and so on,” Apartment List Senior Research Associate Sydney Bennet said. “If you miss that gap in the middle for housing, it has a chain reaction.”
And the aftermath of that is systemic poverty and an increasingly unequal America, where only those at the very top of the economic chain can own their homes and build equity through properties while the middle class is hollowed out. This isn’t only a housing and rental crisis, this is the reflection of the crumbling foundations of a broken society. And nothing that our leaders are doing is making things any better. The financial meltdown that we’re witnessing today is a reminder that more distress is coming for everyday Americans. And sadly, it looks like real estate will be the next domino to fall.
Report: 62% of American Consumers Live Paycheck to Paycheck
A report revealed 62 percent of United States adults live paycheck to paycheck.
A report by PYMNTS and LendingClub, a peer-to-peer lending platform, revealed that as of February, 62 percent of Americans live paycheck to paycheck, including 48 percent of high-income consumers.
The report noted that though inflation is lower than it was in July, consumers are still contending with rising costs.
“Inflation has made life more and more expensive, and consumers have already made moves to cope, such as pulling back on discretionary expenses,” the report read. “But one can only pull back so far on spending, and PYMNTS’ data reveals that consumers are finding another way to navigate their lower purchasing power.”
The report observed that for some people “supplemental income may be the key” and noted that about a quarter of consumers had a side job in addition to 17 percent who had other forms of supplemental income.
The report noted 39 percent of those who lived paycheck to paycheck “with issues paying their bills” mentioned “extraordinary expenses” as their reason for seeking side work.
Some 55% percent of respondents reported their supplemental income grew as a share of their total income over the last 90 days.
The report surveyed 4,125 U.S. consumers from Feb. 7 to Feb. 23 and also considered economic data from other sources.
A February press release from LendingClub indicated that in January 60 percent of consumers were living paycheck to paycheck, two percent lower than in February.
The press release also touched on data about outstanding credit card balances, with the average consumer having credit card debt totaling 35 percent of their savings.
However, this figure varied among different consumer groups. Those who indicated they were living paycheck to paycheck without issues paying their bills maintained credit card balances equaling 62 percent of their savings, and those who were living paycheck to paycheck and had trouble paying their bills had credit card debt exceeding their available savings by more than 50 percent.
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