DEMAND ESTIMATION AND FORECASTING

This research estimates the demand for the goods and services offered by the WalMart chain of retail stores. Demand estimation for the firm's products is performed by forecasting the firm's sales. Sales are forecasted through the application of three separate procedurestime series analysis, barometric economic indicator analysis, and econometric analysis.

WalMart Stores, the world's largest retailer, operates an expanding chain of discount retail stores in 49 of the 50 states of the United States (Tucker, 1994b, p. 1653). The rapid growth strategy followed by the firm is a major factor in the continued growth in the demand for the company's products because the company's reputation for fair dealing and low prices precedes its entry into new markets.

Retail store sales growth was strong (+9.1 percent) in the United States in 1994 and is projected to be strong (+5.4 percent) in 1995 (Tucker, 1994a, p. 1627). General industry growth bodes well for WalMart sales growth.

Consumer confidence levels slipped around the time of the 1994 general election (Tucker, 1994a, p. 1627). A slippage in consumer confidence provides discount retailers with an advantage over more traditional retailers, and WalMart is the consummate discount retailer in the United States.

The unemployment rate in the United States has trended downward since the election of President Clinton (Council of Economic Advisers,

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Category: Economics - D