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Early Layaway Gives Away Something About Wal-Mart

Alyce Lomax
August 21, 2012

Wal-Mart (NYSE: WMT  ) may be in a worse pre-holiday season position than many investors think. Take its decision to launch its holiday layaway program in September, way before you can even say "boo" for the spooky Halloween season. This move illustrates just what kind of plight Wal-Mart's core customers are in -- and why recessionary times aren't necessarily a positive for the Bentonville behemoth.

The discount giant said it plans to start offering layaway programs much earlier than last year, starting on Sept. 16 versus last year's Oct. 17 launch date. According to Wal-Mart's U.S. Chief Merchandising and Marketing Officer, "The customer was saying if they had two more pay cycles that really would be helpful for them."

This development illustrates some pretty severe budgetary constraints on Wal-Mart's core demographic. One of the most difficult things Wal-Mart has been unable to achieve over the last several years is wooing more financially stable consumers into its stores.

Wal-Mart's core customers are unfortunately so strapped that they're juggling their finances from paycheck to paycheck, and are less likely to throw extra discretionary items into their carts. Meanwhile, some of those customers defected to rock-bottom discounters like Dollar Tree (Nasdaq: DLTR  ) and Family Dollar (NYSE: FDO  ) around 2008 and never went back.

Furthermore, Wal-Mart's thrown some interesting twis