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Wal-Mart’s Future: Will It Become Engine Of the U.S. Economy

Wal-Mart’s SuperCenters have become modern-day Main Streets, with all the requisite stores and services of a downtown shopping district.

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NEW YORK — With its image firmly etched in the consumer consciousness, Wal-Mart Stores Inc. has become more than the world’s largest company.

Its SuperCenters are modern-day Main Streets, with all the requisite stores and services of a downtown shopping district. With a $4.5 billion cash nest egg and outsized ambitions, the company is poised to make significant acquisitions and launch any number of new retail concepts.

Wal-Mart is also a barometer of the national economy. During a recent roundtable discussion about the economy led by Chris Matthews on CNBC, Maria Bartiromo, another of the network’s hosts, advised viewers to “get back into the stock market. Buy the blue chips, buy Wal-Mart.”

To the extent that a majority of the population shops at Wal-Mart, the world’s largest retailer is one of the best gauges of the country’s economic temperature, Bartiromo added.

She’s hardly the first person to suggest a Wal-Mart index.

“Given the degree that our collective economic health relies more on the insatiable American consumer than on the declining American manufacturer, does it make sense to consider Wal-Mart as today’s best economic proxy?” Daniel Gross, author of “Bull Run: Wall Street, the Democrats, and the New Politics of Personal Finance,” wrote on Slate.com in June.

More people shop at Wal-Mart every week than at any other store. The company’s revenues — $245 billion in 2002 — constitute close to 2.5 percent of America’s gross national product.

Lee Scott, Wal-Mart Stores Inc. president and chief executive officer, told an audience at the company’s annual meeting in June that sales in stores open at least a year typically increase between 3 percent and 4 percent. If Wal-Mart expands its square footage by 8 percent as planned, sales will increase by $25 billion to $27 billion, he said.

At the same meeting, international division head John Menzer was upfront about the company’s global ambitions: “Today, the U.S. represents 37 percent of the gross national product of the world. That leaves 63 percent to focus on our international growth opportunities.”

Wal-Mart is said to be the largest customer for consumer product giants such as the Walt Disney Co., Procter & Gamble, Kraft and Revlon. It is also the country’s biggest seller of clothing, jewelry, diamonds, books, CDs, DVDs, groceries, toys and sporting goods, among other things, effectively beating category killers such as Barnes & Noble and Toys “R” Us at their own games. It’s expanding its furniture departments and inflicting a whole lot of hurt on electronics chains.
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