Wal-Mart’s U.S. sales drop another sign that the economy is turning–and a signal to put Wal-Mart on my watch list

Sun fails to come up. Water no longer wet.

Wal-Mart (WMT) sales dropped at its U.S. stores for the quarter ended on January 31 2010.

Wal-Mart comparable sales dropped? That’s the first time ever. Ever.

Time to add this company to my watch list for a buy sometime within the next three months.

If you’re looking for thin reeds (See my post http://jubakpicks.com/2010/02/18/my-thin-reeds-say-the-first-half-of-2010-will-be-surprisingly-strong-in-the-u-s/ ), here’s another one that says U.S. consumers are feeling better about themselves. Some portion of the consumers who found shopping at Wal-Mart so attractive during the worst of the recession has apparently decided that it’s okay to spend a little more. Read more

What’s next? Give away the computer? Well, sure. The profits are in the accessories

Give away the razor; make money on the razor blades. It’s a cherished business strategy popularized by companies such as Gillette.

But how about Give away the computer; make money on computer covers? Heard that one yet?

Well, it’s worked just fine at Wal-Mart (WMT) where a Compaq Presario model sells for $298. And now it’s spreading to Best BUY (BBY) and Staples (SPLS). Best Buy picked up two percentage points of market share from February through April thanks to aggressive sales in an expanded electronics section focusing on laptops and netbooks. Staples has increased its selection of computers in those two market segments by 50%.

When I was a kid growing up in New Jersey, I swear that a local retailer ran adds saying “We lose money on every sale and make it up on volume.” Now that can’t possibly work, can it? Aren’t computer retailers cutting their own margins–and throats?

No way.

In fact, these companies are actually late comers to a major economic trend. Read more