• by Thom Forbes  @tforbes, August 16, 2011

You've got to wonder if Wal-Mart executives weren't thinking of themselves when they first saw the spot "Stuck," which broke last April. Created by The Martin Agency, it opens with Crisco, Blue Bonnet, Pam and a Stanley Saw moving down a checkout conveyer belt. It then shows a pair of red-haired brothers with impish faces, one of whom peers out sheepishly at his dad from between the rungs of a stairway banister.

"Did your brother have anything to do with this?"

"No ... yes."

"Only Walmart has low prices every day on everything you need," we're informed by the graphics and tagline.

It was a spot that marked a return to the retailer's you-can't-beat-our-prices roots following some well-documented missteps in the land of "Save Money, Live Better'" and downright merchandising mistakes.

Today it will announce its second-quarter results and few analysts believe that it has found a way to slip out from between the rungs -- eight straight quarters of negative same-store sales in the U.S. -- even as it's taken a new-old position on emphasizing lowest prices.

The AP's Anne D'Innocenzio points out that Wal-Mart's results "are considered a bellwether of consumer spending because the company draws nearly 10% all non-automotive spending in the U.S." She reports that analysts expect a 0.7% decline at Walmart stores and a 5.4% increase at Sam's Clubs, according to Factset, which will all add up to a 0.2% gain.

But MarketWatch's Andria Cheng writes that even as the company is addressing its merchandising gaffe by returning products such as "hunting gear and plus-sized apparel" to Walmart shelves, it is fighting a perception that maybe it doesn't really have the best prices in town anymore.

Cheng cites a report from Consultancy WSL Strategic Retail that finds that 86% of 1,500 Walmart shoppers in an April survey believe that they can get a better deal elsewhere -- primarily at dollar stores.

Miguel Bustillo takes that angle and runs with it in a Wall Street Journalstory carrying the hed, "Wal-Mart Loses Edge: Perception That Retailer No Longer Has Best Prices Undercuts Sales Turnaround." "The competitive landscape has changed," WSL Strategic Retail's CEO Wendy Liebmann tells him. "And the economic trends that are battering Wal-Mart's core shoppers are not diminishing."

Citigroup analyst Deborah Weinswig says that many customers are driving to stores closer to home to scrimp on gas. Meanwhile, she says, the company "has lost mind share in the U.S."

Morgan Stanley's Mark Wiltamuth says it was "shocked" by a survey of 1,100 customers that found that 60% thought they could find a better price at a competitor. That includes Amazon.

Late last week, news broke that two top online execs -- Raul Vazquez, who led the developed markets group in global e-commerce, and Steve Nave, head of Walmart.com in the U.S. -- were leaving the company and that it would transfer management of its e-commerce business to heads of stores in developed countries. But observers weren't necessarily blown away by the development.

"Wal-Mart has been lagging in e-commerce, and the loss of two executives won't help where the company's going," Customer Growth Partners LLC president Craig Johnson told Bloomberg's Matt Townsend and Ashley Lutz. "It will be challenging for them to build the momentum they need."

Meanwhile, "senior leadership within Walmart's merchandising organization continues to undergo a transformation," RetailingToday.com reports. It has the lowdown, if not the lowest-down, on who's replacing whom doing what.

Reuters' Jessica Wohl points out that even as the retailer is "making every effort to offer the best prices on a wider variety of goods in order to win over shoppers who have gone to other chains," it's also being pressured by suppliers such as Procter & Gamble and Kellogg, who want to raise prices to pay for the increased cost of materials like grain and oil.

"They are having to get more competitive on pricing just as inflation is hitting," Wall Street Strategies analyst Brian Sozzi tells Wohl.

But whatever the actual sales figures are today, investors might be wise to stay seated and pay rapt attention to some "Lessons on Investing From America's Richest Family," which was the headline of an oft-emailed Wall Street Journal piece over the weekend by Karen Blumenthal, the author of Mr. Sam: How Sam Walton Built Wal-Mart and Became America's Richest Man.

"After the stock market lost 20% of its value in October 1987, Sam Walton, then one of America's richest men, was unfazed," Blumenthal writes. "In less than a week, the value of his Wal-Mart Stores stock had dropped almost $3 billion, reducing his wealth to a mere $4.8 billion. "It's paper anyway," he told the Associated Press. "It was paper when we started and it's paper afterward."

As one friend commented, "I'd like to get me a piece of that paper."