Wal-Mart (NYSE:WMT) has been an interesting retail stock for the past year, with its business performing quite well. Many consumers defected from higher-priced retailers as the economy staggered into a serious recession. At its annual shareholder meeting, Wal-Mart's top brass vowed to keep these new converts. Is that too tall an order, though?

Star power
One might think of Apple (NASDAQ:AAPL) or Starbucks (NASDAQ:SBUX) when contemplating annual corporate meetings featuring celebrities, but apparently Wal-Mart was able to throw such a show, with Ben Stiller, Miley Cyrus, and Michael Jordan. (Ben Stiller even made a joke at rival Target's (NYSE:TGT) expense.) Of course, come on, Wal-Mart was a rock star in 2008.

Even if their stock prices have dwindled over recent months, let's not forget that Wal-Mart and McDonald's (NYSE:MCD) seemed like the only sure things in a battered retail landscape last year. In fact, they were the only stocks in the Dow Jones Industrial Average that rose at all in 2008.

Wal-Mart also revealed a new $15 billion stock buyback, and yesterday it disclosed plans to hire 22,000 new workers this year. Today's unemployment data underlined the fact that many companies simply aren't hiring.

Wal-Mart cleans up its act ... and cleans up
I have to admit, Wal-Mart was long one of my favorite companies to bash, due to some of its business practices. Its treatment of workers has long been a bone of contention for critics, and it has often been terribly tough on suppliers. (For example, it basically put the screws to Rubbermaid 10 years ago, leading to that company's eventual merger with Newell, forming Newell Rubbermaid (NYSE:NWL).) For a long time, you could feel better about yourself shopping at Target or Costco (NASDAQ:COST).

However, Wal-Mart has been cleaning up its image; lots of its environmental initiatives show that its monstrous size (and influence) can be used for positive changes. And last year, as much as I had long questioned Wal-Mart's relevance in retail, I had to admit that the major recession actually worked in Wal-Mart's favor. Indeed, Wal-Mart was back in its element. With times that tough, offering rock-bottom prices is arguably a socially responsible move.

The Wall Street Journal pointed out that Wal-Mart revealed that 17% of its traffic last quarter consisted of new customers, and these customers shelled out an average of 40% more than its regulars. It's a mind-blowing tidbit and certainly backs up the theory that customers are trading down amid economic hardship.  

Can it last?
Wal-Mart CEO Mike Duke contends that the behemoth can keep these new customers even when the economy recovers: "Our customers will stay with us when this economy turns around and they have more discretionary money to spend. We are building long-term loyalty to Wal-Mart. I believe the economic crisis has brought a fundamental shift in consumer attitudes and behavior. There is a 'new normal,' in which people want to save money and are getting smarter about saving money."

Those are fighting words. The idea that Wal-Mart can keep some consumers who may be ditching the cheap-chic Target, upwardly mobile Costco, and other higher-end options is one that should be front and center in Wal-Mart shareholders' minds. When people feel comfortable spending money again, and focusing on more than just the necessities, will they flee Wal-Mart for higher-end environs? Or is our consumer culture's new frugality here to stay?

I think the days of excessive luxury are probably over for a very long time, now that lessons are being learned and we're taking our collective medicine. However, I'm not necessarily convinced that Wal-Mart will be the chief beneficiary. Consumers' new frugality (and a return to fiscal reason) may force a lot of luxury retailers out of business, and it might force many surviving retailers to compete aggressively on price, which they're clearly already doing. However, that kind of environment doesn't necessarily help Wal-Mart.

I thought I'd invite Foolish readers to put their thoughts in the comment boxes below. Can Wal-Mart really keep its new customers, draw more in, and show that it has formed real, sustainable competitive advantage against price-slashing rivals? Or is this just a temporary advantage for the retail behemoth?

Further Foolishness:

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.