Big-Box Retailers Versus the Payroll Tax, Round 1: Safeway Wins

At the end of last week, Bloomberg reported that Jerry Murray, Wall-Mart’s (NYSE:WMT) VP of finance and logistics, sent an email to other executives that contained a few harsh realities. “In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” he wrote. “The worst start to a month I have seen in my ~7 years with the company.”

Shares of the discount retailer quickly dropped 2.2 percent, and the news cast a pall over the markets that had a material impact on the major indices. Disastrous sales at the nation’s largest retailer in February (and January, as previously-leaked emails revealed) suggests a heavy negative impact from the expiration of the payroll tax holiday.

If American financial belts tighten, then consumer dollars evaporate from the economy. Dollars that were once discretionary are now either going to Uncle Sam or into savings accounts. As a result, big-box earnings released this week gained some extra attention…