Wal-Mart to Hire 22,000 Workers This Year -- What's It Mean?
This morning, Wal-Mart -- the nation's largest retailer -- said it would hire 22,000 new workers this year.
On the face of it, that looks like good news in an economy that could use some.
"During this difficult economic time, we're proud to be able to create quality jobs for thousands of Americans this year," Eduardo Castro-Wright, vice chairman of Wal-Mart U.S., said in a statement.
Dig a little deeper, though, and you'll be disappointed.
Last year, Wal-Mart added 33,800 new jobs, because it opened a lot more stores and hired up at its Sam's Clubs. Last October, the retailer said it would open 142 to 157 new or expanded stores across the country through the 2010 fiscal year, fewer than in previous years.
Part of the reduction has to do with saturation of the U.S. market; Wal-Mart is mature here, as opposed to overseas.
But part of it has to do with cutbacks associated with the recession. Even Wal-Mart has to if not reduce, then slow its growth.
Though it sounds like a big number, 22,000 represents less than 2 percent of Wal-Mart's total workforce of 1.45 million. Wal-Mart is the nation's largest private employer.
At the same time, investors are having a tougher time figuring out how well Wal-Mart is doing, day-to-day, through this recession, now in its 18th month.
Wal-Mart recently stopped providing monthly sales data. The company said it wanted investors to focus on longer-term, quarterly results as opposed to the more volatile month-to-month results.
But that doesn't help smaller investors, who don't have access to company managers, which large investors do, as was pointed out this morning on CNBC.
Further, if you take Wal-Mart out of the monthly retail sales figure, you create a huge data hole in your understanding of the health of the U.S. consumer economy. It would be like removing GM, Chrysler and Ford from monthly auto sales figures and trying to figure out how well the auto industry is doing.
Despite Wal-Mart's pullback in growth, like McDonald's, it has been a beneficiary during this recession of the "trade-down" effect. This means that instead of shopping at Target, bargain hunters are shopping at Wal-Mart.
Also, Wal-Mart has its steady grocery business -- it is also the nation's largest grocer -- to carry it through tough times.
June 4, 2009; 2:29 PM ET
Categories: The Ticker | Tags: Target, consumer spending, retail, wal-mart
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