The Waltons, America’s richest family whose combined wealth is approximately $149 billion, saw their personal fortune decline by approximately $11 billion as Wal-Mart shares plummeted last week. The Walton family fortune is controlled by founder Sam Walton’s three surviving children and his deceased son’s widow. Together, they own over 50 percent of all outstanding Wal-Mart shares.

 

The massive superstore chain’s stock was listed at $67.67 when trading began on October 14, but the price plummeted to $60.03 by the end of the day. Wal-Mart stock is currently listed at $58.85. The approximately 10 percent decline in value in one day is Wal-Mart’s worst single day performance in almost three decades. Although this was a particularly bad day, owners of Wal-Mart stock have been losing money all year. Earlier this year, Wal-Mart shares were valued at $90.47 each.

 

 

The disastrous day was caused by a weak growth and earnings report released by the company. By not living up to the predictions of professional analysts and bankers, Wal-Mart caused panic among its investors. Wal-Mart’s competitive advantage has always been its low prices, which are maintained by keeping costs as low as possible. The nationwide fight to increase minimum wages has increased Wal-Mart’s expected costs, thus decreasing their expected profits.

 

Ultimately, $11 billion does not have a material effect on the well-being of the Walton family, however the members of America’s richest family should be concerned about the well being of their namesake company. According to Bloomberg, Wal-Mart believes that earnings will fall another 12 percent in 2017.

 

Can Wal-Mart’s strategy of out-cheaping the competition survive in the current marketplace? Will the retail staple be able to turn its performance around? Feel free to leave a comment or find me on Twitter @Andrew_Morse4