Running head: WAL-MART MACROECONOMIC INDICATORS 1

Wal-Mart Macroeconomic Indicators

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Wal-Mart Macroeconomic Indicators

An economic indicator is a metric or approach used to evaluate, measure, and examine

the general state of the economy. These indicators are collected by state institutions or private

business intelligence organizations in the form of a census or survey, which is later scrutinized to

generate economic indicators. Top indicators, such as customer durables, share values, net

business formations, and the yield curve, are used to forecast an economy's potential movements.

The information or numbers on these financial guideposts mostly changes before the economy,

thus leading to their categories. Walmart is one of the biggest retailers in the United States that is

part of the macroeconomic indicators since these factors mostly affect their performance. Thus,

the paper discusses six macroeconomic indicators relevant to Walmart, its international

operations, and its effects on the regional and national levels.

Macro-Economic Indicators Relevant to Wal-Mart

The biggest economic indicators significant to Wal-Mart include consumer spending,

gross domestic product, employment cost index, unemployment rate, customer price index, and

import and export price index.

Unemployment Rate – This is the ration of the unemployed people to the entire

workforce at a certain point in time. The unemployment rate is lagged and counter-cyclical guide

as it responds slowly to the modifications in the economy. It is counter-cyclical because its

movement is most opposite of that of the economy. With an economic delay, the unemployment

rate increases steadily, which has, in turn, been stuck in the United States at over 9 percent for

the longest time (Barone, 2020). This indicator is essential to Wal-Mart because it directly

affects consumer spending and can lower an organization's workforce value by downside wage

correction to market standards.

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Gross Domestic Product – this is the market value of the entire products and services

made within a nation for one year. It indicates the country's economic output, making it an

essential statistic for evaluating economic well-being (Barone, 2020). The United States has the

globe’s biggest GDP, which in 2020 has been affected by the pandemic. The forecast outlook of

GDP development in the country is modest because of the weakening of mortgage business, risk

aversion contributed by the world's crisis, and low global demand. As an economic indicator,

GDP is significant to the Wal-Mart business as it helps estimate its growth level. It also gives

business forecasts of the industry; if it is positive, the company can additionally invest in

infrastructural growth. The gross domestic product also suggests the citizens' everyday living as

higher GDP is linked with a better standard of living.

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Employment Cost Index – information from this indicator is received in a quarterly report

from the United States Division of Labor, and it calculates the growth of administration

compensation, benefits, and wages, which is retrieved from a survey employer's payrolls in the

last month of every quarter. This indicator highlights the movements in the cost labor inclusive

of fringe benefits, wages, and bonuses for workers at all stages within the business (“Economic

Indicators”). Wal-Mart keeps its labor costs and expenses under control because they hire several

part time workers internationally. Therefore, the business uses this indicator to plan and lower

future employment values by employing veterans and assisting their part-time associates in

locating full-time careers with the company by stabilizing their careers at Wal-Mart; hence,

lowering worker turnover.

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Consumer Price Index – this is a mostly used indicator used to calculate inflation and

state economic regulations (Barone, 2020). During inflations, customers can feel hardship in the

price of the products and services they purchase; for instance, one can acquire a bottle of drink

from the store with a given amount and pay different prices weeks later to get the same product.

Wal-Mart can use this indicator to evaluate what it charges for its low price business plan

because inflating items' prices can have a significant impact on the business in the future. This

data is significant in maintaining that the organization can accomplish future sales projects.

Customer Spending – this is the sum of the entire consumption expenditure of all

households in an economy. Like GDP, customer spending is leveled as coincident and pro-

cyclical, as consumer spending can be effected through an economic slowdown. The uncertainty

in the market status enhances customer's propensity to save rather than wasting. This indicator is

essential to the company as it shows the consumer's propensity to spend. If clients are inclined to

spend, the business can invest in development schemes and earn profits.

United States Export and Import Price Index – this indicator measures the change over

time in the value of products and services acquired from other nations and sold to foreign buyers

by residents. The price index is a significant Bureau of Labor Statistics program that evaluates

the alteration in the prices of products in the United States economy. Wal-Mart can use these

data to figure out their international and local progress. The information can tell the business the

costs of goods and services imported and exported since they can fluctuate due to other expenses

associated with such commodities. Having such data can allow the business to control costs

effectively. It continues to operate globally while still keeping export sales high and enhancing

the general net income.

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Responding to Changes

Walmart has always kept its business innovative and adapted to the constant

modifications associated with the mentioned economic indicators with the primary objective of

increasing its revenues. Over the past years, the business has created value for itself and society

by collaborating closely with suppliers, non-governmental institutions, and its leaders to impact

the whole system positively. Through its strengthened societal system, the business has increased

growth and ignites collective action on the problems that matter mainly to its customers,

societies, and business to convert the retail supply chains for economic, ecological, and societal

sustainability. The company's existing state has experienced positive growth of 2.9% in the fiscal

year 2020 compared to the previous period.

The business is consequently applying these macro-economic indicators to strategize on

customer satisfaction, which is the most significant aspect of any business. Walmart has plans of

sticking to these indicators, which will contribute to growth in sales across its new markets and

within the United States. These programs continue to target stock buyback initiatives and capital

expenditure programs (Govindarajan & Gupta, 2002). On the other hand, there is still room for

the company to improve on what they do, and this can only be achieved by following these
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indicators strictly as they provide adequate guidance on the prospects and areas that need quick

modifications. New ventures must be added and take advantage of diversity, which is

fundamental for expanding business growth levels.

Wal-Mart’s Global Operations

The business is the biggest retailer and has internationalized its selling to under-serve

markets and increase their gains in earnings demanded by its employees and other stakeholders.

Wal-Mart dominates the United States market and receives 25% of its sales from approximately

15 global markets. It acquired its first success in Mexico, Canada, and later in the United

Kingdom. However, failure was imminent in Germany, Hong Kong, South Korea, and Indonesia.

These failures have not stopped the business from exploring more markets globally. The business

has significantly influenced both national and regional clients by holding their primary ideology

of everyday low prices. This factor has made the business acknowledged globally with new

customer emerging from all walks of life. The business is learning to adapt effectively to the

existing surroundings, making it hard for its rivals both for regional and national levels.

Multiculturalism is about accepting and respecting other cultures and knowing what different

people embrace to be more socialized without discrimination. The company is vital when people

are involved, heard, and empowered. It has acknowledged diversity and inclusion, which are

fundamental to its core values and integrity. Global operations for Wal-Mart mean a continuous

close association with the customers, associates, suppliers, and communities across the universe.
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References

Barone, A. (2020, September 22). Economic Indicator. Retrieved from

www.investopedia.com/terms/e/economic_indicator.asp

Economic Indicators: List By Category. (n.d.). Retrieved September 28, 2020, from

tradingeconomics.com/indicators

Govindarajan, V., & Gupta, A. (2002, June 19). Taking Wal-Mart Global: Lessons From

Retailing's Giant. Retrieved from www.strategy-business.com/article/13866?gko=203b4