This research estimates the demand for the goods and services offered by the Wal Mart 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 procedures time series analysis, barometric economic indicator analysis, and econometric analysis.
Wal Mart 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 Wal Mart 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 Wal Mart 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, 1994, p. 14). Lower levels of unemployment generally exert positive influences on retail sales.
The Consumer Price Index in the United States has experienced only modest change over the past year (Council of Economic Advisers, 1994, p. 10). This modest rate of change has alarmed the Chairman of the Federal Reserve Board, but has not been found bothersome by anyone else. Modest changes in the rate of inflation generally bode well for retail sales.
Real wages have been rising at modest levels in the United States over the...