As gasoline prices soar, the bottom is dropping out for Wal-Mart shoppers. So worries the retail giant’s CEO, Mike Duke. Wal-Mart customers are simply running out of money, and that’s hurting sales, Duke said, according to CNN.
"We're seeing core consumers under a lot of pressure," Duke said. "There's no doubt that rising fuel prices are having an impact." Regular gasoline now averages $3.88 nationally, according to the American Automobile Association.
Most of the chain’s shoppers live paycheck to paycheck and shop in bulk, Duke noted.
|High gasoline prices are pinching shoppers.
(Getty Images photo)
"Purchases are really dropping off by the end of the month even more than last year," Duke said. "This end-of-month (purchases) cycle is growing to be a concern.”
Gasoline has risen in large part because of pressure on the U.S. dollar. Oil is priced in dollars and typically rises in price as the greenback weakens. West Texas Intermediate trades at $113 a barrel. Brent crude is priced at $124.81.
After a highly anticipated press conference by Federal Reserve Chairman Ben Bernanke, the buck bounced slightly higher after generally moving lower against foreign currencies. Gold has hit a new record high of $1,538 an ounce. The metal has moved 6.8 percent higher against the dollar in just the past month.
The Fed nevertheless on Wednesday reaffirmed its plan to keep buying U.S. Treasury debt in order to keep interest rates low through June and hinted at unofficially extending its massive easing program past the deadline if necessary.
Meanwhile, first-quarter GDP came in at 1.8 percent, a sluggish number in any economy but especially slow for a recovery from such a deep recession. The personal consumption expenditures index, a broad measure of U.S. inflation, hit 3.8 percent.
A slowing economy could push oil prices lower as Americans drive and consume less.
"We see a soft patch in economic activity in Q2 and with oil prices sustained at these levels, people will be looking more intently at signs of demand destruction," Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas, told Reuters.
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