Wal-Mart has reported a third consecutive drop in U.S. comparable-store sales. They also have issued a forecast which doesn’t expect the situation to improve.
There are several things that have contributed to this drop in retail spending, but one thing that stands out is that executives believe Obamacare is affecting sales. The Wall Street Journal reports:
“While it is not coming through in customer research, we do know that some of our customers are concerned about the impact of the Affordable Care Act,” Carol Schumacher, vice president of investor relations, told analysts on Thursday. “For many of our customers, having to afford health care and insurance may be another line item in their personal budget that they may not have had to cover previously.” Wal-Mart says it has 140 million customers a week.
And it is not just Wal-Mart.
True Value Co., the hardware-store cooperative with 4,600 locations, was more emphatic about the potential impact.
“This has been a massive concern for us,” True Value Chief Executive John Hartmann said Friday. “Discretionary spending will certainly be impacted by the changes in the contribution Americans will have to make for health care.”
This should surprise no one. Obamacare is adding a huge amount to both the rates and the out of pocket expenses in many cases. We hear the anecdotal evidence all the time.
While there is still a lot more data that needs to “come in” before we can measure it all out, even the fear that a huge additional expense is on its way can paralyze consumers. If you don’t feel confident that you won’t have a sudden huge expense coming out of your budget then you are going to tend to avoid purchases until you can get proof that you are not in danger. The uncertainty alone is enough to hurt the economy.
Obamacare is effectively a dramatic new tax on the middle class and everyone else that has yet to be calculated. As such it naturally kills businesses who are hoping for these people to have enough money to buy their products.