The WalMart Customer Indicator

The Wall Street Journal picks up an extraordinary illustration of poverty and government assistance in America. At WalMart, before midnight on the 30th or 31st of a month, customers come in and fill up their carts with milk, bread and baby formula — the essentials. At midnight, they receive their benefits — WIC or SNAP benefits, presumably — on special debit cards and then pay for their purchases:

The paycheck cycle we’ve talked about before remains extreme. It is our responsibility to figure out how to sell in that environment, adjusting pack sizes, large pack at sizes the beginning of the month, small pack sizes at the end of the month. And to figure out how to deal with what is an ever-increasing amount of transactions being paid for with government assistance.

And you need not go further than one of our stores on midnight at the end of the month. And it’s real interesting to watch, about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs,and continue to shop and mill about the store until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.

And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they’ve been waiting for it. Otherwise, we are open 24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason.

To put this in perspective, 40 million Americans currently rely on food stamps, and one in seven falls below the government’s very low poverty threshold.