Wal-Mart takes a risky turn with gas ads

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Wal-Mart Stores Inc. has rolled out television commercials addressing high gasoline prices, diverging from its typical ads with Smiley the cartoon character.

While many retailers have blamed high fuel costs on poor earnings over the past year, few have directly addressed high gas prices in advertising. The world's largest retailer was the first to admit last year that high gas prices were going to seriously hurt earnings, according to analysts.

Gasoline prices are "a good hot button to tap into," said Jim Wisner, president of Wisner Marketing Group Inc., in Libertyville, Ill. "From the strategic aspect, [the question is] how are we going to make a price message with something really visceral with consumers right now?"

Discount retailers struggle with convincing customers that "$1 off here, 50 cents off there" adds up to enough savings to shop at the discounter often.

"It you put it into the context of, 'by coming here more regularly, you can save the family vacation,' that now takes on quite a bit of meaning, at least in terms of breaking through the clutter," Mr. Wisner said.

In the Wal-Mart commercial, a family piles camping gear in the car to set out on a summer vacation. Because of high gas prices, they have to camp in a field across the street from the house. The message is to shop at Wal-Mart for everything to reduce the number of trips in the car and save up for a vacation.

Wal-Mart's price-conscious customers are the first to feel the impact from higher fuel costs and less disposable income. In the District, fuel costs are up about 90 cents per gallon since last year.

"We understand that gas prices will take a toll on the summer plans of our customers and believe that through our low prices and assortment of the items that people need for their summer activities, we can actually limit the number of trips that people need to take to prepare for these activities and as a result, allow them to do more," spokesman Kevin Gardner said in an e-mail.

The commercials are also different because they feature customers -- instead of employees and the chain's cartoon Smiley face -- and are not done in a store.

"This is a marked departure for our Rollback campaigns, which in the past featured Smiley in a variety of costumes slashing our price signage in-store," Mr. Gardner said.

Other companies have started gas promotions, but they have a more obvious connection to fuel, such as Royal Dutch Shell Group and Sunoco. Shell is giving six customers "gasoline for life" and Sunoco is giving away 10,000 gallons of gas to one winner. (Neither are available in Virginia or Maryland because of state laws, but D.C. residents are eligible.)

Gerald Celente, director of Trends Research Institute in Rhinebeck, N.Y., expects more retailers to address rising gas prices in advertising.

Mr. Celente said the ads will have a marginal effect in reminding consumers about low prices at Wal-Mart.

But he said the ads could have the effect of reinforcing the idea that gas prices are eating up all their disposable income.

"If you keep reminding people of how hard it is, there could be a subconscious negative effect of 'you can't really afford to buy anything,'" he said. "This is a small Band-Aid for a big problem."