Wal-Mart Stores, Inc. (WMT): Where Are All the Customers? Good Question.

Although Wal-Mart Stores, Inc. (NYSE:WMT)‘s quarterly results seem to have calmed investors’ worries about the discount giant, they shouldn’t get too comfortable. Bloomberg’s report regarding worrisome leaked emails by Wal-Mart executives last week is still a significant element for investors to factor in to their decisions about purchasing Wal-Mart shares right now.

“Where are all the customers? And where’s their money?” one executive’s email read, discussing a chill in January sales at Wal-Mart. In a more recent email, company executive Jerry Murray described month-to-date February sales as “a total disaster,” and said that the start of February 2013 is the worst he’s seen at the company in about seven years.

Wal-Mart’s quarterly results today really shouldn’t calm anyone. Although the retailer’s earnings rose 8.6% and revenue increased 3.9%, same-store sales in the U.S. rose a relatively anemic 1% in the U.S. Meanwhile, Wal-Mart’s released a cautious attitude regarding guidance for the current quarter, which obviously isn’t going too well thus far.

Beleaguered lower-income consumers have surely been feeling the pinch from recent developments, like skyrocketing prices at the gas pump and the expiration of the payroll tax cut, which is a significant slam to the take-home pay of the lowest-paid workers.

Granted, when any of us ask “Where are all the customers?” we could consider some other options in the retail space. The aforementioned lower-income customers may be tempted to trade down to dollar stores, a trend that has precedent in recessionary years. Of course, they may be simply unable to buy many more discretionary goods given the pinches to already stretched budgets, so maybe many are hunkering down.

In fact, dollar stores face the same threats that Wal-Mart does even if they cater to similarly constrained consumers. Results from companies like Dollar Tree, Inc. (NASDAQ:DLTR), Dollar General Corp. (NYSE:DG), and Family Dollar Stores, Inc. (NYSE:FDO) have recently faltered compared to those of headier years when they were stealing traffic from Wal-Mart, meaning that the price competition is extra-steep now or that lower-income customers are extra-strapped and cutting way back on spending.

Meanwhile, there’s conventional competition to think about. Judging by market action, could some of the customers be at Safeway Inc. (NYSE:SWY) ?

Investors reacted euphorically to Safeway’s quarterly earnings today, even though they don’t even really look that great. Today’s price is way overdone even if the grocer does claim it’s not experiencing negative headwinds from the payroll tax hit at all. (A short squeeze could be part of the explanation.)

True, the grocer’s fourth-quarter net income increased 13%, but sales only increased 1.2% (bolstered by gift cards and prepaid card sales) and same-store sales increased a measly 0.8%. Safeway also utilized shopper loyalty programs and “invested in price,” obviously seeking to attract shoppers on budgets.