Wal-Mart Stores Inc. is hammering home its low-price message with a new ad campaign in a bid to bring back customers who no longer trust it 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," said Duncan MacNaughton, chief merchandising officer at Wal-Mart in an interview with The Associated Press.
The new commercials come as Wal-Mart's U.S. business is smarting because of mistakes it made on price and selection and as it faces increasing price competition from 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," 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 for its U.S. Walmart stores should be anywhere from down 2 percent to unchanged for the current quarter compared with the same quarter last year.
The campaign is an acknowledgement that Walmart 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?" Sozzi said.
Wal-Mart said it is adding 8,500 items to its inventory, 11 percent more in an average store. In some categories, the selection will be more than before the inventory slashing, McNaughton said.
In its ad campaign, the commercial featuring the Easter egg highlights Wal-Mart's variety, from Glidden black and green paint to Starburst jelly beans.
The changes are bringing back local food favorites and national brands in household basics and general merchandise like consumer electronics. Some changes are tailored to local markets. In Phoenix, for example, shoppers will find pool supplies and lawn and garden items year-round.
Wal-Mart said it will take a few more months to finish bringing back the grocery items and will take the rest of the year for departments like clothing and electronics.
Late last year, Wal-Mart had said it aimed to have all the groceries restored by the end of 2010 and would add back the general merchandise items by spring.
Wal-Mart's price-match policy has been around for several years, but in recent months, the company has been using it as a weapon to compete with rivals. One commercial, released Monday, focuses on its ad match guarantee.
The ad features a customer pointing to an ad flyer and informing the cashier that a product is 20 cents cheaper at a rival store. Everyone in the store, from the person who stocks the shelves to the manager, scrambles to help, yelling, "Match it!"
Wal-Mart said it has been training sales associates to better police prices of local competitors.
Another change is customers won't have to bring competitors' advertisements to the cash register to get the match because the associates should have the information on hand. Customers will still have to ask for the price match.
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