The Consumer Price Index in the United States has experienced only modest change over the past year (Council of Economic Advisers, 1994, p. 10). This modest rate of change has alarmed the Chairman of the Federal Reserve Board, but has not been found bothersome by anyone else. Modest changes in the rate of inflation generally bode well for retail sales.
Real wages have been rising at modest levels in the United States over the past year (Council of Economic Advisers, 1994, p. 8). Increases in wages have generally exceeded inflation, a state of affairs that generally is favorable to retail sales.
The gross national product (GNP) has been increasing steadily in 1994 (Council of Economic Advisers, 1994, p. 2). GNP growth generally is favorable to retail sales.
Sales for Wal#Mart Stores in the United States are forecast for 1995 through the application of times series analysis, barometric economic indicator analysis, and econometric analysis. Each of these forecasts is presented in separate discussions.
A forecast is an estimate of the future value, or future values, of a variable (Webster, 1991, p. 6). To be meaningful, forecasts must project values of a variable in measurable units of the variable. A number of procedures exist by which forecasts may be developed. The best forecasts are those developed through the application
The simplest of the quantitative techniques which may be used in forecasting is the fitting of a trend line. The major problem with this methodology is that it relies almost entirely on past performance. The fitting of a curve through regression analysis is methodologically similar to trend analysis. The curve fitting regression equation, however, permits the introduction of new data into the analysis, through the refinement of projections for the independent variables involved.
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