- Associated Press - Monday, April 11, 2011

NEW YORK | Wal-Mart Stores Inc. is hammering home its low-price message with a new ad campaign hoping to lure back customers who no longer trust the world’s biggest retailer to save them money.

The campaign, starting Monday, bears the slogan “Low Prices. Every Day. On Everything” and features five 30-second commercials that range from an Easter egg hunt to a customer asking for a price match.

“We have lost our customer confidence … in having the lowest price,” Duncan MacNaughton, chief merchandising officer at Wal-Mart, acknowledged in an interview.

The new commercials come as Wal-Mart’s U.S. business is smarting because of adverse shopper reaction to its new approach on prices and selection and because of increasing price competition from deep discount “dollar” chains and Amazon.com.

In fact, its slogan “Save Money. Live Better,” in use for several years, now appears in smaller type in the ads, underscoring Wal-Mart’s shift in strategy to hammer hard that it has everything shoppers need at rock-bottom prices.

Wal-Mart is restoring thousands of items it had stopped carrying in an overzealous bid to clean up its stores, from fishing supplies in Dallas to snowblowers in Minneapolis, and has returned to its “everyday low prices” roots.

To change perceptions, the company also said it is directing store employees to comb through competitors’ advertisements so price matches at the register are easier.

“Our company is determined to create the best one-stop shopping experience and low prices on the right products backed by a clear, consistent ad-match policy,” Mr. MacNaughton said.

The world’s largest retailer failed to reverse an almost two-year slide in a key revenue measure in its fourth quarter, which ended in January, after all but promising in November it would do just that.

Last year, Wal-Mart had strayed from its “everyday low prices,” the bedrock philosophy of founder and namesake Sam Walton. Late last year it switched back to emphasizing low prices across the whole store, instead of heavily promoting selected items.

It could take a while to reverse the sales declines. The company predicted in February that revenue at stores open at least a year in the U.S. should be anywhere from down 2 percent to unchanged for the current quarter compared with the same quarter last year.

The campaign is an acknowledgment that Wal-Mart traffic is still weak, Wall Street Strategies analyst Brian Sozzi said.

“I am concerned that Wal-Mart is taking to the airwaves at the same time it acknowledges it’s not where it needs to be with product restoration, therefore risking customer disappointment yet again,” he said.

Moreover, he said stores are looking disheveled because new merchandise is coming in faster than Wal-Mart can display and sell it.

“Has customer traffic been so soft in the first quarter that Wal-Mart is willing to go out on a limb and market aggressively despite the store appearance reflecting a sense of disarray?” Mr. Sozzi said.



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