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American Morning

Minding Your Business: Wal-Mart Wants Your Money

Aired January 09, 2003 - 07:41   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


PAULA ZAHN, CNN ANCHOR: Time to talk business now and find out how the markets are going to be moving with Andy Serwer.
How are you?

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning. I'm fine, Paula. How are you doing?

ZAHN: Good tie!

SERWER: Thank you very much.

ZAHN: Lavender is you, Andy.

SERWER: I'm not going to touch that one. Thank you, Bill Hemmer.

Anyway, kind of a disappointing session yesterday on Wall Street, Paula. The Dow down 145 points, the Nasdaq down as well, the S&P 500 down -- everything down yesterday.

What was going on? Bad news from the corporate front, layoffs already starting to come into play this year, really disappointing; 16,000 jobs lost already this year.

ZAHN: Wow!

SERWER: Yesterday, 8,000 jobs were eliminated at Alcoa, the aluminum giant. Hey, that was Paul O'Neill's old company.

Also, hurting the markets yesterday, I believe, mounting opposition to the president's plan from Democrats. I think it's really questionable now whether or not the elimination of the dividend tax will actually become law, because you're starting to see some of the Democrats, who were on the president's side initially when he announced the first tax cuts a couple of years ago, now backing off and saying they might not support him with this particular bill.

Also, we're going to be looking at retailers today. A lot of them are going to be announcing sales for the month of December. They're starting to come in across the transom right now. Wal-Mart saying that sales were pretty good actually.

ZAHN: Really? But that is not to say that's what we're going to be hearing from the other retailers.

SERWER: Well... ZAHN: Because they knew going into December they were predicting...

SERWER: Right.

ZAHN: ... weak sales.

SERWER: Right, very much of a mixed picture today.

ZAHN: Now, Wal-Mart is getting into another business, aren't they?

SERWER: Yes, this is really amazing. Wal-Mart -- is there any business Wal-Mart won't get into? I mean, now they're moving into financial services.

ZAHN: And why wouldn't they?

SERWER: Yes, why wouldn't they?

ZAHN: Because about else they've done has succeeded.

SERWER: I mean, they do everything. Most people out there know that Wal-Marts have banks in them already. These are freestanding banks they have arrangements with. But this is moving into other businesses like check cashing, money orders, also money wiring. And you know, like every other business they've moved into, Paula, they're going to be undercutting.

Let's look at that check cashing line right there -- a $3.00 fee to cash a payroll check. So, if you walked into a Wal-Mart, you'd pay $3.00, but if you went to a check cashing place with a $500 check, you'd pay at least $15.00. There you see the 3 to 6 percent.

So, what are you going to do, right? I mean...

ZAHN: Well, you know where you'd go to cash your check.

SERWER: Yes, I mean, absolutely. Interesting, Wal-Mart says that only 20 percent of its customers have checking accounts. So, they're really going after this. The post office, all of those small, little check cashing places, Western Union that does money wiring, they are going to start to feel the full force of Wal-Mart, and you can ask other retailers, that is not a lot of fun.

ZAHN: Well, let me ask you this: Does this appear on its face to be a brilliant strategy?

SERWER: I think it's a really good strategy. They've actually tried to move into banking per se to get a bank charter. State regulators have objected to that. Of course, the banks have lobbied hard to prevent that from happening. But they're going to do everything they can to get more and more of the consumer dollar into their store, and I think people -- I mean, it makes sense. You walk in there, you cash your check, you've got all of this money, you're walking out, hey, there's a kid's tricycle. ZAHN: Yes, where are you going to spend it?

SERWER: I've got, you know -- I mean...

ZAHN: You're not going to walk across the street. You're going to stay right there.

SERWER: Right, yes, it makes a lot of sense.

ZAHN: I think that's pretty smart.

SERWER: Yes.

ZAHN: We'll see how it works. Thanks, Andy.

SERWER: OK.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.







Aired January 9, 2003 - 07:41   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Time to talk business now and find out how the markets are going to be moving with Andy Serwer.
How are you?

ANDY SERWER, "FORTUNE" MAGAZINE: Good morning. I'm fine, Paula. How are you doing?

ZAHN: Good tie!

SERWER: Thank you very much.

ZAHN: Lavender is you, Andy.

SERWER: I'm not going to touch that one. Thank you, Bill Hemmer.

Anyway, kind of a disappointing session yesterday on Wall Street, Paula. The Dow down 145 points, the Nasdaq down as well, the S&P 500 down -- everything down yesterday.

What was going on? Bad news from the corporate front, layoffs already starting to come into play this year, really disappointing; 16,000 jobs lost already this year.

ZAHN: Wow!

SERWER: Yesterday, 8,000 jobs were eliminated at Alcoa, the aluminum giant. Hey, that was Paul O'Neill's old company.

Also, hurting the markets yesterday, I believe, mounting opposition to the president's plan from Democrats. I think it's really questionable now whether or not the elimination of the dividend tax will actually become law, because you're starting to see some of the Democrats, who were on the president's side initially when he announced the first tax cuts a couple of years ago, now backing off and saying they might not support him with this particular bill.

Also, we're going to be looking at retailers today. A lot of them are going to be announcing sales for the month of December. They're starting to come in across the transom right now. Wal-Mart saying that sales were pretty good actually.

ZAHN: Really? But that is not to say that's what we're going to be hearing from the other retailers.

SERWER: Well... ZAHN: Because they knew going into December they were predicting...

SERWER: Right.

ZAHN: ... weak sales.

SERWER: Right, very much of a mixed picture today.

ZAHN: Now, Wal-Mart is getting into another business, aren't they?

SERWER: Yes, this is really amazing. Wal-Mart -- is there any business Wal-Mart won't get into? I mean, now they're moving into financial services.

ZAHN: And why wouldn't they?

SERWER: Yes, why wouldn't they?

ZAHN: Because about else they've done has succeeded.

SERWER: I mean, they do everything. Most people out there know that Wal-Marts have banks in them already. These are freestanding banks they have arrangements with. But this is moving into other businesses like check cashing, money orders, also money wiring. And you know, like every other business they've moved into, Paula, they're going to be undercutting.

Let's look at that check cashing line right there -- a $3.00 fee to cash a payroll check. So, if you walked into a Wal-Mart, you'd pay $3.00, but if you went to a check cashing place with a $500 check, you'd pay at least $15.00. There you see the 3 to 6 percent.

So, what are you going to do, right? I mean...

ZAHN: Well, you know where you'd go to cash your check.

SERWER: Yes, I mean, absolutely. Interesting, Wal-Mart says that only 20 percent of its customers have checking accounts. So, they're really going after this. The post office, all of those small, little check cashing places, Western Union that does money wiring, they are going to start to feel the full force of Wal-Mart, and you can ask other retailers, that is not a lot of fun.

ZAHN: Well, let me ask you this: Does this appear on its face to be a brilliant strategy?

SERWER: I think it's a really good strategy. They've actually tried to move into banking per se to get a bank charter. State regulators have objected to that. Of course, the banks have lobbied hard to prevent that from happening. But they're going to do everything they can to get more and more of the consumer dollar into their store, and I think people -- I mean, it makes sense. You walk in there, you cash your check, you've got all of this money, you're walking out, hey, there's a kid's tricycle. ZAHN: Yes, where are you going to spend it?

SERWER: I've got, you know -- I mean...

ZAHN: You're not going to walk across the street. You're going to stay right there.

SERWER: Right, yes, it makes a lot of sense.

ZAHN: I think that's pretty smart.

SERWER: Yes.

ZAHN: We'll see how it works. Thanks, Andy.

SERWER: OK.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.