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Rising Gas Prices Cause Business Problems for Wal-Mart

When gas prices go up it affects every business out there. From delivery services to retail stores, every aspect of the business world feels the blows of gasoline crisis. Even mega-store Wal-Mart is seeing a reduction in its predicted profits for 2006 due to steep gasoline and utility prices. Although Wal-Mart did not see any losses, it did see a low rise in estimated sales for the month of May. In fact, Wal-Mart predicted that all stores open for at least a year would see at least 2-4% rise in sales. However, the actual percentage was a mere 2.3%.

Although 2.3% sales increase for the month of May alone may seem good for some businesses, for a mega-conglomerate such as Wal-Mart, it is mere peanuts. One Wal-Mart research executive was quoted saying that "[we] continue to see higher gasoline and utility prices affecting our customers". This statement echoed comments made earlier this month by Chief Executive Office of Wal-Mart, Lee Scott. Although these sales figures are not final, it is safe to say that Wal-Mart has not managed to reach their goals this month.

But Wal-Mart is not the only business being affected by increasing oil prices. Traders on Wall Street are closely watching for signs of reduced sales from many businesses. It seems that soaring oil prices are causing massive issues through out the financial scope of the US. In fact, a recent survey, conducted by the National Retail Federation trade group, found that three out of four US consumers are planning to significantly cut back on their spending due to rising gasoline prices.