When Will You Forgive Wal-Mart?

Wal-Mart (NYSE: WMT  ) is hoping to win back its good name. The world's largest retailer kicked off a new ad campaign over the weekend, using Saturday's Kentucky Derby as a way to begin its own race to the finish line.

The odds-on favorite Orb won the race in a muddy track at Churchill Downs, and Wal-Mart itself knows that it, too, will have to get dirty if it wants to emerge victorious.

Yes, Wal-Mart is the odds-on favorite. The retailer estimates that 60% of the country shops at the discounter in any given month. Wal-Mart accounts for nearly 10% of the country's non-car sales.

However, it also sees that union-backed attacks and some unflattering developments in recent years are tarnishing the Wal-Mart brand. The retailer is ready to do a better job in getting its point of view across.

"I'm part of an American success story," the ad begins, going on to promote the company's advanced distribution network, efficient trucking fleet, and the realized costs savings it achieves -- and passes on to consumers -- by dealing directly with manufacturers and local farmers.

Another spot in "The Real Walmart" series of television ads showcases shoppers, highlighting the things that they hope to accomplish by saving money at Wal-Mart. Yet another ad offers the employee perspective, pointing out that more than 75% of store managers began as hourly associates. That spot also promotes the education benefits for degree-seeking associates and the quarterly bonuses paid out when particular stores perform well.

One can argue that the ultimate "American success story" is that Wal-Mart rang up more than $469 billion in revenue worldwide in its fiscal year that ended in January, 5% ahead of the prior year. Comps at its namesake stores rose a modest 1.8% on the year.

In short, Wal-Mart isn't broken. The knocks -- some fair -- may sting, but consumers continue to flock to the discount department store chain because saving money's always fashionable.

It's better to be Wal-Mart than J.C. Penney (NYSE: JCP  ) , which saw its sales plunge 25% in a rudderless attempt to re-establish its retail identity. Smaller rival Target (NYSE: TGT  ) bears the "cheap chic" label, but it matched Wal-Mart's 5% pop on the top line this past year.

Wal-Mart bulls will argue that no one's forcing people to work at the retailer if they don't want to, and that shoppers are welcome to go elsewhere if lower prices aren't worth the hassle.

However, Wal-Mart's doing the right thing in making sure that it casts its practices and opportunities in a favorable light. Some of the criticisms of Wal-Mart are fair. The chain has gotten into hot water overseas as it expands its global presence. There have also been plenty of shots closer to home concerning its struggles against organized labor when it comes to wages, holiday hours, and health-care provisions.

Thankfully for Wal-Mart, it didn't become the world's largest retailer by accident. It may as well strike now before the attacks actually start pulling away potential associates and shoppers.

The world is Wal-Mart's orb -- and its Orb.

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  • Report this Comment On May 05, 2013, at 9:09 PM, mr091468 wrote:

    Walmart should tout its history. For instance they started the first WMT in 1962 coming in with low reasonable prices, not trying to make a home run on every sale. We have a family owned grocery business in AZ and they're still whining and moaning and groaning about WMT's grocery business. They started their store in 1932, meaning they had 30 years on Sam Walton if they wanted to compete. Their prices are outrageous to this day. WMT has done things right. Sam Walton started out as a junior sales trainee at JCP in Iowa. Look at what he and his family has done. Amazing.

  • Report this Comment On May 06, 2013, at 4:17 AM, Corsair3117 wrote:

    A good article and quite fair. The latter term doesn't apply to any number of "Foolish" WMT articles. One quibble though-quite apart from the substance of the column. Orb's win came at odds of more than 5-1. The term "odds-on" is defined as much higher probability (more than 50-50) and consequently lower payout such as 4-5, 3-5, 2-5. All are "odds on" with payouts of less than $4 for a two dollar bet. WMT indeed seems 'odds on" in their campaign. Orb was a far riskier, albeit quite successful, proposition paying $12.80 on each 2 dollar bet

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