Wal-Mart Credits Ads With Leap In Awareness

WalmartWhile lawsuit settlements and currency fluctuations caused a profit decline for the quarter, Wal-Mart Stores turned in better-than-expected results for the full fiscal year, with sales climbing 7.2% to $401 billion in sales. And the company says an increase in fourth-quarter ad spending paid off--with U.S. consumer awareness of its "Save money, live better" message jumping 80% this quarter over last year, leading to increased store traffic.

The company also credited its strong results with a commitment to delivering lower prices, remarking that because of its efficiencies, Walmart prices rose less than the Consumer Price Index. Wal-Mart says it will continue to look for ways to offer even lower prices, using national brands as well as private-label lines--and adds that its relaunch of its Great Value private-label line is on track, with items scheduled to hit shelves late next month. In a conference call discussing the results, executives also boasted that customer satisfaction levels are at a record high.



Walmart stores "have differentiated themselves even more this year, with our strong value messaging in every merchandising category," executives say. In the U.S., its comparable-store sales rose 3.2% without fuel, three times higher than the prior year. And in its fourth quarter--a difficult one for most retailers--comparable-store sales gained 2.8%. One weakness was apparel, as consumers cut back on discretionary spending, but the company says it still outperformed the market in that segment.

Separately, researchers are finding that Walmart is extending its lead faster in some categories than in others. According to BIG Research's January Retailing Report, Walmart continues to wallop its competition in the health and beauty aisles--with one in three shoppers saying they prefer it for cosmetics and shampoo purchases, compared to just 8.1% for Target, 7.8% for CVS, and 7.5% for Walgreens. It also continues to dominate in groceries, with 18.4% of respondents saying they shop the discounter more often than other stores for food, more than double Kroger, its closest competitor, with 7.1%, Publix with 4%, and Safeway, 3.4%.

It does not win in every category, however, despite its merchandising breadth, BIG reports: Best Buy still tops the electronics list, Home Depot wins in home improvement and hardware, and Payless is tops in shoes.


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