Based on disappointing traffic and sales, Wal-Mart Stores said it expects same-store sales to be up two to three percent in the five-week period ending Jan. 3, down from previous expectations of three-to-five percent. According to the company, a last-minute surge in traffic was too little, too late.
- KC's View:
As bad as this is for Wal-Mart, the Bentonville behemoth will recover. But the handwriting -- no doubt in red ink -- would seem to be on the wall for Kmart. After all, if Wal-Mart has trouble in this environment, what hope is there for the Michigan-based discounter?
After all, the bad news in the retailing sector seems to overwhelm the good. FAO Inc, the toy retailer, is shutting down up to 70 outlets in an effort to avoid bankruptcy. Companies as diverse as Best Buy, Barnes & Noble, and office Depot have been facing a crunch. There are some analysts who believe that niche retailers such as Tower Records and Mrs. Fields Original Cookies also will be facing financial stresses.