• by Sarah Mahoney  @mahoney_sarah, March 10, 2011

In an effort to recapture lost sales, Walmart says, it will launch a new ad campaign next month, reclaiming its role as the store with the lowest prices and broadest assortment. And it has stepped up its small-store expansion plans -- testing three different formats -- and is poised to roll out hundreds of them very quickly.

The new marketing effort comes after an advertising slowdown of some months, Bill Simon, president/CEO, Walmart U.S., told investors at the Bank of America Merrill Lynch Consumer Conference, which was also webcast. "We've been quiet, because we wanted to be able to deliver on our 'Everyday Low Prices' and assortment promise, with a new ad match guarantee."

Ads are tagged "Backed by our ad match guarantee. Save money. Live Better," and Simon says they signal a return to its core brand promise. "Lots of different retailers trade on lots of different things -- trend, quality. But for us, it's always been price and assortment, these everyday low prices. It's what our reputation was built on and where we're going today," he says.

He says last year's shift to fewer items was a mistake, and that the company is well on its way to increasing its assortment again. "We've let our customers down in that area in recent years," he admits. "When customers make that long drive and the long walk into a Supercenter, it is important that they get what they came for -- but we were seeing people come in with 20 things on a list, and leaving with only 16."

The addition of the ad-match guarantee puts some teeth into the chain's low-price claims. "It's always possible for a high-low store to beat us on a given item, but we're focusing on the entire basket," he says.

A recent report from Kantar Retail, for example, found that while Walmart and Target continue to closely contend on price, "Target's basket price came in less expensive." But Walmart's strategy is based on this blanket approach, rather than Target's specific price promotions -- and that's a positioning Simon says will continue.

He says the company is also sharpening its focus on the types of items it sells. "If 0 is a hotdog vendor on the street, and 100 is Tiffany, we're coming in that 30 to 60 range," he says, "while Sam's Club and Walmart.com are more focused on the 50 and up range."

He also says the Bentonville, Ark.-based chain has stepped up its small-store rollout, testing three different formats -- rebranding its Neighborhood Market to Walmart Market, an even smaller format called Walmart Express, and Walmart on Campus, which is smaller still. "We're testing these in urban and rural markets, with and without pharmacy, with and without fresh foods," he says. "And when we get it in the right shape, we will be ready to roll out very quickly -- hundreds at a time, and maybe more."

He adds that sales in all its U.S. stores have been particularly encouraging in the last four weeks, and that while rapidly rising gas prices historically mean a decrease in store traffic, the store can also potentially benefit, "since there's a massive consolidation of one-stop shopping."

The company is also rolling out its Pick Up Today program, and says that by June, it will be available in nearly 3,600 Walmart stores nationwide. The service is being expanded to include up to 40,000 items.

Online orders are usually ready for pickup in about 4 hours, and orders placed after 6 p.m. are ready for pickup at 10 a.m. the next day. "I want it to be called 'Pick Up Now,'" Simon says, "but we're not ready for that yet."