Price wars are looming for discount retailers in 2012 — and this time Walmart may be the one that gets bruised.
The world’s largest retailer yesterday reported disappointing fourth-quarter results — with sales and profits missing Wall Street’s expectations, sending its shares tumbling nearly 4 percent.
Topping the list of disappointing news is the paltry 1.5 percent same-store sales increase posted by the Bentonville, Ark., chain — a result that fell sorely short of the 7.7 percent gain notched by Saks, which saw strong demand for luxury goods from its well-heeled clientele.
Still, that gap wasn’t merely a reflection of the divide between the nation’s haves and have-nots, according to analysts. It’s also an indication that Walmart is facing brutal competition from rivals on a host of fronts — from Bed Bath & Beyond to dollar stores.
“There are going to be 2,000-plus more dollar stores a year from now than there are today,” said Deutsche Bank analyst Charles Grom, citing the torrid expansion of chains like Dollar General, Family Dollar and Dollar Tree.
With gas prices expected to soar in the coming months, these chains are likely to steal more shoppers from Walmart since they’re closer to home. By comparison, Walmart’s new “Walmart Express” unit, a smaller format that competes with dollar stores, is only slated to roll out 20 to 25 stores.
Walmart’s quarterly profit inched up just 3.4 percent to $5.19 billion, despite the fact that it lured more shoppers in by reviving layaway services, added 10,000 new products to its shelves and got a boost from rising food prices.
None of those benefits will be repeated during the coming holiday season, Grom notes.
Saks, meanwhile, saw a 48 percent profit gain.
Macy’s reported a better-than-expected 12 percent gain, sending its shares up to a new 52-week high, before they eased a bit to close up 1.2 percent at $36.69. CEO Terry Lundgren said holiday business was “terrific,” with sales up 5.5 percent.