Wal-Mart on the Ropes, But Still Swinging

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The bigger the company, the bigger the problems tend to be, and the world’s biggest retailer is no exception. During the past twelve months, Wal-Mart (Stock Quote:  WMT) has faced all kinds of drama. While it remains a force to be reckoned with, this year has shown that even Wal-Mart is susceptible to setbacks.

Wal-Mart’s sales have declined by 1.4% compared to last year and its overall same store sales, which insiders expected to grow, actually fell by 1.2%. And as of now, sales are expected to be slow to recover.  "Our business in the U.S. is very challenging right now,” Wal-Mart’s Chairman Rob Walton told Reuters. “We are only expecting a slow recovery in the U.S., nothing extremely fast,"

But that’s only part of the story. The company has also faced numerous lawsuits this year. They’ve been sued for:

  • Having a giant swamp rat in the store, allegedly causing a woman to injure herself
  • Using excessive force to fight shoplifting
  • Reporting an Arizona couple to authorities for sexual assault of their own children after an employee discovered bath-time pictures featuring the kids. A court found no evidence of sexual assault.
  • Discriminating against certain religions (Muslims)  and ethnicities (latinos).
  • Colluding with Netflix and “unfairly setting prices in their rental businesses.”

For years, Web sites like WalmartWatch and WakeUpWalmart have been devoted solely to criticizing the company, but it was only this year that a website popped up targeting customers who decide to shop at the store. PeopleofWalMart was created in August and has already gotten a lot of buzz for highlighting the inappropriately dressed housewives and elderly people, not to mention odd expressions of patriotism, and hair that’s larger than life.

Wal-Mart’s curse may have started last November when one Wal-Mart employee was trampled to death during the Black Friday rush, and four customers were injured. Or it may just be the product of a bad economy and desperate consumers.

Other wholesale companies have suffered in this economy, too. Target's (Stock Quote: TGT) profits fell by more than 6 percent in the second quarter of this year, though it hasn't faced the same public negativity.

Still, we all expect Wal-Mart to prosper in the years to come. Already, the company has announced changes to boost sales during the holidays, offering 100 items for $10, and it is working to expand its presence in the prescription drug market, among other initiatives. For now though, its reputation could definitely use a bailout.

—For a comprehensive credit report, visit the BankingMyWay.com Credit Center.

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