NEW YORK ( TheStreet) -- The beehive of activity up and down the long aisles at one of Wal-Mart's (WMT - Get Report) stores represents the pulse of the average American household, one that is likely budget-minded and time-starved.
That pulse should have beaten stronger during the holiday season, however, due in large part to a healthier U.S. economy.
Consumer confidence in January hit its highest level since the start of 2004. The January jobs report marked the longest stretch of job gains above the 200,000 level dating back 1994. Prices at the gas pump have plunged about 70% from September.
One important gauge will come in the form of Wal-Mart's U.S. same-store sales growth during the holidays. Third-quarter Wal-Mart U.S. same-store sales rose 0.7%, the first gain in seven quarters.
On the eve of Wal-Mart's fourth-quarter results and initial 2015 guidance, TheStreet takes a look at three ways to tell if a happier consumer is frequenting the retailer's usually busy aisles.
1. Are more people visiting Wal-Mart stores?
Wal-Mart had been dealing with fewer consumers visiting its giant U.S. supercenters each quarter, a byproduct of more people buying stuff online, high gas prices and a sluggish labor market. Customer traffic to Wal-Mart's U.S. stores has declined for eight straight quarters. In the third quarter, traffic fell 0.7%, an improvement from the 1.1% drop seen in the second quarter.
The slight, sequential progress in Wal-Mart's traffic counts in the third quarter suggests consumers began to trust their newfound disposable income from cheaper gas and new jobs was here to stay. PepsiCo (PEP - Get Report) , which relies on Wal-Mart U.S. and warehouse operator Sam's Club for 18% of its annual North America revenue, may have served up a valuable clue that consumers visited the chain more frequently in the final months of 2014.
Pepsi's Frito-Lay's North American sales volume rose 2% in the fourth quarter, marking a solid end to a year for the snacks division in which overall organic revenue improved 3%.
If consumers were truly feeling better about their financial well-being, they will have visited Wal-Mart more often during the holidays and into January, boosting the company's foot traffic.
2. How well is food selling on Wal-Mart's better-stocked shelves?
Wal-Mart has clearly had difficulties selling affordable food to U.S. consumers as local supermarkets have slashed prices in meat, chicken and produce. Furthermore, it has also been contending with essential, everyday itemas like milk and bread being perpetually out of stock.
Same-store sales for Wal-Mart's overall U.S. grocery business, which now includes food and consumables -- items like toilet paper and tissues -- was virtually unchanged in the third quarter. The result would have been worse if not for net inflation increasing approximately 210 basis points versus last year, led primarily by meat and dairy, according to Wal-Mart. The retailer added that consumers were "trading down" in high inflation categories -- buying a cheaper cut of meat, for instance.
In the second quarter, Wal-Mart's same-store sales for grocery were also unchanged compared with the prior year, while falling by a "high single-digit percentage" in the consumables business. Sales of grocery items constitute 56% of Wal-Mart's annual sales.
This past holiday season, under the leadership of new Wal-Mart U.S. President Greg Foran, the retailer added labor hours back in its store to ensure shelves were stocked. In addition, it offered even lower prices to penny-pinching consumers in search of a refrigerator fill-up.
With stocked shelves and a healthier economy, Wal-Mart's food sales should have increased in the fourth quarter. An increase would not be unlike what organic grocer Whole Foods (WFM) notched in the quarter as it invested in lower-priced produce. "We continue to see unit (sales) lift from the lower produce price we're testing in several markets, said Whole Foods co-CEO Walter Robb on a Feb. 11 earnings call.
3. Is Mom buying even more apparel at Wal-Mart?
The apparel section at Wal-Mart is no-frills -- simple blue jeans and tops made for the appropriate weather at prices cheaper than Kohl's (KSS - Get Report) and J.C. Penney (JCP - Get Report) are the norm. Gas prices didn't start plunging until September but Wal-Mart's apparel sales were strong throughout the year.
"Throughout the quarter, we experienced comp sales growth in home and apparel, driven by newness across the categories," said Foran during Wal-Mart's last earnings call. The undisclosed gain in the third quarter followed a low-single-digit percentage increase in the second quarter. In the first quarter, Wal-Mart's apparel sales increased as well, led by a double-digit percentage rise in active wear.
If shoppers were truly in a better place financially during the holiday season, likely they stocked up on apparel to make it through the long winter. Furthermore, they returned to Wal-Mart's apparel section in January to purchase some of the early spring items the retailer was offering, i.e. bright-colored t-shirts. Such activity would be evident in even stronger apparel sales in the quarter compared to most of 2014, boding well for Wal-Mart's spring-selling season and back-to-school shopping that begins in July.