Faced with the risk of losing its major competitive advantage, can Wal-Mart
The discount retail giant is responding to a long stretch of lackluster sales figures and lost market share with an "It's Back" campaign. Wal-Mart cut many items from its shelves in the thick of the recession, in an effort to get lean, mean, and simplified. Now, it's restocking 8,500 of those banished goods, including fishing poles, fabric, and plus-sized fashions, according to Reuters. In its effort to cut costs, the company apparently started eliminating items customers actually wanted.
Wal-Mart's campaign, which will include TV advertising, will also inform shoppers that it matches rivals' prices. CNN Money recently reported that major rival Target
The retail giant's flagging traffic implies defections in different directions. Higher-end shoppers probably gravitated to discounters like Target and Costco
Beyond Wal-Mart's usual competitors, shoppers can now find excellent deals on items at Amazon.com
Despite Wal-Mart's negative reputation in some quarters (labor issues, Mom-and-Pop-shop-killer rep, major contributor to suburban sprawl, etc.), it always had the siren song of low prices to hold shoppers' interest. In this strangely precarious economic climate for the company, its shrewd effort to regain its footing may prove easier said than done, since the Bentonville Behemoth's immense scale doesn't exactly make it a nimble enterprise. I won't consider Wal-Mart an appealing stock idea until it shows solid signs of regaining its basic competitive advantage -- preferably in the form of better sales.
Would you buy Wal-Mart now and hold it for the long haul? Or should existing shareholders hurry up and sell, and move onto greener, more growth-oriented pastures? Let us know in the comments box below.
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Alyce Lomax does not own shares of any of the companies mentioned. For more on this and other topics, check back at Fool.com, or follow her on Twitter: @AlyceLomax. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.