The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Walmart made it clear last September that they did not have any “position” on the $5 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP), which provides food stamps to millions of Americans nationwide.

However, after disappointing fourth-quarter sales and profits, the company may want to reconsider.

The Financial Times reports that although Walmart initially expected sales to be flat, estimates now show that they are more likely “slightly negative.” Chief financial officer Charles Holley says that “two factors contributed to lower comp sales performance”: SNAP cuts and bad weather, which forced a rash of temporary store closings.

This isn’t surprising, considering that 20 percent of Walmart’s customers use food stamps.

“Walmart caters to lower-income consumers which have been hit disproportionately hard,” says Morningstar analyst Ken Perkins. Perkins adds that the world’s largest retailer also faces serious competition from other retailers, like Amazon.

Walmart’s expected earnings for the fiscal year are below the previously estimated $5.11 to $5.21. Though analysts like Perkins say the company could rebound from the negative earnings in its last quarter – and its massive layoffs and store closings worldwide – it will most likely continue to face declining stock value in the next quarter, thanks to the new bipartisan farm bill, which includes cuts of $1 billion a year, reducing benefits by $90 a month for over 800,000 food stamp recipients.

These cuts not only affect the superstore’s customers, they take food off the plates of their own employees.

Studies have found that Walmart employees make up the largest group of food stamp recipients in nearly every state, which isn’t surprising given the size of the retailer’s workforce and its consistently low wages.

Since the cuts seem to be permanent, the company’s best hope seems to be an increase in the minimum wage. Though it would initially hurt its bottom line, the higher wages could make up the loss of demand from SNAP reductions.

If nothing else, it would reduce the amount that taxpayers spend to subsidize Walmart’s employees.

Photo: Ron Dauphin via Flickr

Advertising

Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

Chief Justice John Roberts

The House Select Committee hearings are swaying political independents and centrists to reject the power-grabbing tactics used by Donald Trump and his Republican enablers to overturn the 2020 presidential election, according to several polls and surveys of battleground state voters released on Thursday, June 30.

“Vast majorities of the American people are paying attention, and they are deeply concerned,” said Leslie Dach, co-chair of Defend Democracy Project, an advocacy group dedicated to the principle that voters determine the outcome of elections. “They believe that a crime has been committed. They want accountability in the courts and at the ballot box. And they hold not just President Trump responsible, but they hold his allies and Republicans responsible for what happened.”

Keep reading... Show less

Jeff Danziger lives in New York City. He is represented by CWS Syndicate and the Washington Post Writers Group. He is the recipient of the Herblock Prize and the Thomas Nast (Landau) Prize. He served in the US Army in Vietnam and was awarded the Bronze Star and the Air Medal. He has published eleven books of cartoons, a novel and a memoir. Visit him at DanzigerCartoons.

{{ post.roar_specific_data.api_data.analytics }}