It's also not clear what sort of profits will come from the government's stimulus package. Somewhere between 20 and 30 percent of the $100 billion worth of stimulus checks is expected to end up in store coffers, but that could come up short if spending on debt reduction and expensive gasoline eats up a big chunk of the average check. The unspoken theme here is that Wal-Mart and a few others (Costco is often mentioned in the same breath) will win, but most of the competition will lose, so a rising share price for Wal-Mart doesn't necessarily bode well for the economy or investors.
The biggest losers? Traditional grocers and ailing retailers like Sears. "We expect Wal-Mart to have a stronger market share coming out of the slowdown than when they went in," according to Bill Dreher, an analyst at Deutsche Bank.
And if stimulus checks don't spur enough spending to get the economy through the current slowdown, the next time shoppers start cutting back will come during the fourth quarter, which includes the all-important holiday spending season for retailers. If that happens, the cautious mood among consumers that helped kick-start Wal-Mart's bullish summer could mean a reverse if caution turns to fear. Executives may be right to remain cautious.