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How the "Wal-Mart Syndrome" Pushes Millions More Onto Food Stamps

Call it the "Wal-Mart Syndrome".

Entire industries -- such as low-end retailers like Wal-Mart Stores Inc. (NYSE: WMT) and fast food chains like McDonald's Inc. (NYSE: MCD) - pump up their profits by paying employees extremely low wages.

But thousands of Americans who need to support a household on such low wages - either the federally mandated minimum wage of $7.25 or just a bit above it - can only do so with public assistance.

In other words, with the help of welfare.

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What Wal-Mart's Dismal Sales Mean for These Retail Stocks

While we showed you last week how high-end retail stocks were soaring right now, on the flipside of things is Wal-Mart Stores Inc. (NYSE: WMT).

A Wal-Mart executive offered a candid view of just how bad sales have been of late in an e-mail to other company execs obtained by Bloomberg News.

"In case you haven't seen a sales report these days, February [month-to-date] sales are a total disaster," Jerry Murray, VP of finance and logistics, said in the Feb. 12 e-mail. "[It's] the worst start to a month I have seen in my seven years with the company."

The retail giant's woes stem from a confluence of factors hurting sales: the 2% increase in the payroll tax, the recent surge in gas and food prices and consumer confidence levels sinking to their lowest since 2011.

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For Prepaid Cards Like Wal-Mart's Bluebird, Regulation Isn't Always a Dirty Word

A few weeks ago, I wrote about how prepaid cards are proliferating, that American Express and Walmart had come out with a no-fee card called Bluebird, and not everything is as it seems.

You all chimed in with lots of great comments, including some that questioned what I really had against prepaid cards, especially if they are "no-fee" cards and serve those with less-than-average wherewithal (wherever that descending measure is these days) who rely on them for everything from consumer transactions to bill paying and ATM access.

First of all, let me say that I think prepaid cards are good. They're not great, but I hope they get there.

But I want to talk about what's not great, and how to make prepaid cards better.

I told you about the interchange fees that are charged to merchants and how those end up being passed along to consumers. Maybe that's not such a big deal if we can quantify their additional cost on a per-item basis. All I'll say about that is, it adds up.

My problem with prepaid cards is what we can't see about them.

What's going on behind the scenes? Do they offer adequate protection to their users? Is the proliferation of them going to present some systemic risk? How should they be regulated?

Regulation? I know what some of you are thinking. We have too many regulations as it is, and the regulators are all asleep at the wheel anyway, so regulation is the problem not the answer.

I agree with you, but not exactly. You'll see what I mean.

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Three Ways to Brace for a Double-Dip Recession

Economists are torn... Is the U.S. economy on the upswing? Or are we facing the dreaded "double dip recession"? Either way, there are a few things every smart investor needs to do now to protect their nest eggs. Find out what you should do in this free report.

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Brick-and-Mortar Retailers Moving Business Online as Foot Traffic Declines

U.S. retailers this year geared up for the annual back-to-school shopping season, the parents and children didn't fill the streets and shopping malls - they stayed inside, and online, cruising for bargains on the Internet.

Overall sales this August were up only slightly from last year, failing to give stores the boost they needed after a sluggish summer.

A report from MasterCard's SpendingPulse released yesterday (Wednesday) showed that consumers gave a slight bump to children's clothing and consumer electronics with their back-to-school shopping, but pulled back in other areas of merchandise which cut into sales gains.

But among uneven retail numbers this year exists a bright spot that has been growing for years, and is leading companies to overhaul their traditional business models: the online retail market.

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Three Ways to Brace for a Double-Dip Recession: Recession-Proof Stocks

Today (Friday) we conclude our series on bracing for a double-dip recession.

In Part I of this investment series, "Three Ways to Brace for a Double-Dip Recession: Going for the Gold," we discussed ways investors could safeguard against the imminent decline of the U.S. dollar by buying gold.

In Part II, "Three Ways to Brace for a Double-Dip Recession: Going Global," we explored potential investments in foreign countries that have more stable economies and better growth prospects.

And today, we're going to conclude by looking at "recession-proof" stocks right here in the United States.

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Hot Stocks: Wal-Mart Stores Inc. (NYSE WMT) Proves that the Best Defense is an Active Offense

Wal-Mart Stores Inc. (NYSE WMT) has the reputation of being a defensive stock, but lately the company has gone on the offensive. For that reason, it's a good candidate to break out of its recent slump and head higher.

Wal-Mart has been among the stocks to lose ground in the recent market correction. But with more than $400 billion in annual sales, the world's largest retailer is still one of the soundest plays an investor can make - particularly in times of uncertainty.

In the year and a half stretching from January 2008 to June 2009, Wal-Mart stock managed a 3.45% gain despite being interrupted by one of the worst stock market plunges in history.

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We Want to Hear From You: Are U.S. Consumers Finally Willing to Spend Again? Are You?

Recent reports show U.S. consumers are spending again; some are actually even ditching the whole discount mentality in favor of luxury brands, while others are making long-delayed big-ticket purchases.

Individual spending rose for the sixth consecutive month in April, this time by 0.6%, or $36 billion. Personal income was up 0.3%. U.S. gross domestic product climbed at a 3.2% annual rate for the first three months of 2010, and U.S. factory output has risen.

"A lot of manufacturers may be struggling to keep up with demand," Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, told Bloomberg News. "We're seeing clear demand improvements from both consumers and businesses that should provide a strong tailwind for several months at least."

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Only the Strongest Retailers Will Survive in 2010 as U.S. Consumers Continue to Battle Back

The early returns on the 2009 holiday shopping season show a minor gain over last year's abysmal retail sales, and next year will affirm that retailers are successfully adapting to a consumer environment that's very different from years past.

However, 2010 will be difficult for retailers as they contend with high unemployment, tight credit, and aggressive competition.

1 Retail sales gained 3.6% year-on-year from Nov. 1 through Dec. 24, SpendingPulse, a unit of MasterCard Advisors (NYSE: MA) said earlier this week. But an extra day between Thanksgiving and Christmas this year may have skewed the data anywhere from 2% to 4%, SpendingPulse said. Sales in the same period last year declined 2.3% as consumers reeled from the financial meltdown that occurred in the fall.

"The latest holiday shopping season wasn't a rip-roaring success, but at least it met or slightly exceeded expectations," John Lonski, chief economist of Moody's Capital Markets Research Group (NYSE: MCO) told The Associated Press. "Consumer spending is indeed in a recovery mode, which brightens prospects for 2010."

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Investment News Briefs

Intel Pays AMD $1.25 Billion to Settle Multi-Year Lawsuit; WalMart Forecasts Bleak Holiday Sales on Surging Unemployment News; FHA Capital Reserves Lowest in History; Commercial Paper Market Falls For Second Week in Row; Better Ad Market Helps Disney Profit, Sales Grow; British Airways, Iberia to Merge; Barofsky: TARP Will Be a Loss For Taxpayers; Activision Sees Sales of $310 Million on First Day of Game’s Release

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Investment News Briefs

With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. IMF Lowers Global Writedown Estimate; CIT Still Struggling; $1.6 Billion Hong Kong IPO for Wynn Macau; Wal-Mart, Kmart Gunning For Holiday Toy Sales; Toyota Announces Record Recall; BofA Exec Takes […]

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International Sales Help Wal-Mart Beat First-Quarter Earnings' Estimate

By Mike Caggeso Associate Editor A 22% increase in international sales helped Wal-Mart Stores Inc. (WMT), the world's largest retailer and bellwether of the U.S. economy, beat first-quarter earnings' estimates. Net sales for the Bentonville, Ark.-based company were $94.1 billion, a 10.2% increase from last year's $85.4 billion. Net income rose 6.9%, or $2.8 billion, […]

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With Many Hits, Some Misses, Wal-Mart Searches for Success in the Global Economy

By Jennifer Yousfi Managing Editor With the announcement of record fourth-quarter sales and earnings yesterday, Wal-Mart Stores Inc. (WMT) became the world's first $100 billion retailer. "For the fourth quarter, we topped $100 billion in sales, the first time in history that any retailer has reached this milestone in a single quarter," Wal-Mart President and […]

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Wal-Mart CEO Hints at Selling Hybrids at Stores

By Mike Caggeso Associate Editor The parking lots at Wal-Mart Stores Inc. (WMT) retail locations could get much bigger, as the company is in talks with automakers to sell hybrid and plug-in automobiles, H. Lee Scott, the company's chief executive officer, said to store managers and suppliers Wednesday. "Maybe there isn't room for Wal-Mart in […]

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Wal-Mart Opens 100th Store in China, Forecasts More Than 30% Annual Growth

By Mike Caggeso Associate Editor The world's biggest retailer, Wal-Mart Inc. (WMT), is set to get much bigger, as the Arkansas-based company recently won government approval to open its 100th store in China.  Wal-Mart currently has 94 stores open in China, with 24 of them opening this year alone. Its first China store opened in […]

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