Walmart & the Coming Gloom

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My Aunt Carol, bless her, is a shopper. Not in the “finding a good deal” way, but in the “it’s a lifestyle, a performance art” way. She’ll spend three hours comparing organic kale prices at four different stores, then complain about the price of gas. It’s exhausting just hearing about it. Which is why, when the conversation turned to the economy—as it inevitably does at family gatherings—I found myself thinking about Walmart. Not because of any brilliant financial insight, but because it’s where Aunt Carol goes when she’s decided she’s “earned a treat.”

Everyone’s predicting something, of course. Slowdowns, recessions, economic headwinds… it’s enough to make you want to build a bunker and stock up on canned goods. And I suppose that’s what a lot of people are doing, judging by the perpetually empty shelves of anything remotely resembling comfort food. But even if this particular doom-and-gloom scenario doesn’t materialize in 2026 (or whenever the latest prophet of financial ruin has decreed), a downturn will come. It always does. And when it does, things get…interesting.

Most retailers are already feeling the pinch. People are tightening their belts, skipping the impulse buys, and generally behaving like adults with mortgages. But Walmart… Walmart is different. It’s the place where Aunt Carol buys her “treats” even when she’s complaining about the price of gas. There’s a certain…logic to that. Or maybe it’s just that everything’s already cheap to begin with.

Understanding the Business (Or, Why It’s Everywhere)

It’s a simple formula, really: enormous stores, a relentless focus on low prices, and a membership warehouse club, Sam’s Club, for those who want to buy things in quantities they don’t need. It’s the American dream, distilled into a parking lot. The U.S. operations are the engine, naturally, but they’re expanding everywhere. It’s hard to escape.

They’ve been doing this for a long time—since the early 1960s, in fact—and they’ve gotten very good at squeezing every penny. It’s not always pretty, and I suspect there are some very stressed-out suppliers involved, but the result is undeniable: you’d be hard-pressed to find lower prices anywhere else. They also spend a lot of money on technology—same-day pickup, delivery, the works—trying to keep up with Amazon, which is like trying to outrun a particularly efficient algorithm.

And it seems to be working. Their recent quarterly sales were up almost 4.5%, driven by both more shoppers and increased spending. Apparently, even wealthier customers are starting to gravitate towards the bargain bins, which I find oddly comforting. It suggests that even the well-to-do aren’t immune to a little frugality, or perhaps just enjoy the thrill of a good deal.

A Rich Valuation (Or, Why It’s Not a Bargain)

The stock has been doing well, too. Up over 31% in the past year, which is more than the S&P 500. It’s a testament to their success, but it also means the stock isn’t cheap. The price-to-earnings ratio is currently around 42, which is higher than the overall market. It feels a little…optimistic.

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But I suspect there’s a good reason for that. Walmart has a knack for surviving—and even thriving—in all kinds of economic conditions. They’re not glamorous, but they’re reliable. And they’re not resting on their laurels, investing in technology and supply chain improvements to stay ahead of the competition. So, while the stock may not be a bargain, it feels like a relatively safe place to park your money. Especially when the alternative is staring into the abyss of a potential recession.

Which brings me back to Aunt Carol. She may be a chaotic shopper, but she knows a good deal when she sees one. And in a world of economic uncertainty, that’s a valuable trait. I’d be willing to pay up for that.

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2026-01-20 12:53