First of all, the on-line business isn’t going to save Wal-Mart. Yes, they’ve gone from being a non-player to an increasingly large competitor to Amazon (about $10 billion in sales to Amazon’s $60). But Amazon sells at a zero margin so even though Wal-Mart may be able to shift sales from physical stores to on-line, it’s hard to see how this is anything but a drag on earnings.
More importantly is the continuation of the dominant economic trend of the century: the slow decline in middle-income and middle-skill jobs. Many of the folks that a decade or two ago would have been employed in manufacturing or clerical work are now in “early retirement”, long term disability, or otherwise out of the work force. And they shopped at Wal-Mart, many of them. Lower incomes and lower income growth for those who are still employed – a secular trend that will continue to be an anchor on WMT’s earnings.
Wal-Mart Offers Weak Outlook; U.S. Sales Keep Falling - WSJ.com