Wal-Mart Leverages Economic Concerns With Promotion

Do recessions and Wal-Mart go together? The company, which has built its marketing platform on helping families save money, is wasting no time in jumping on the "economic stimulus" bandwagon. The company says it is rolling back prices on many items between 10% and 30% this week. And it's also easing the credit crunch, offering no interest for 18 months on purchases of $250 or more with a Wal-Mart credit card.

A spokesperson for the Bentonville, Ark.-based retailer says the company's TV spots supporting its "Save Money, Live Better" ads, which highlight the company's claim that it saves the average American family $2,500 a year, are still running intermittently. Seasonal rollbacks support that positioning, she says.

"We all know economic times are tough so our plan is to help, with added savings throughout the year, focusing especially on what people want, when they need it," the company's CMO says in a release. "Shoppers are depending on us to deliver the best price so they can stick to their plans, no matter what the economy throws at us. We won't let them down."



And consumers are confident about Wal-Mart's lower prices. "Inflation is back at the same time that housing wealth is declining. This is a big issue for consumers, and there are few solutions," says Richard D. Hastings, economic advisor at the Federation of Credit and Financial Professionals. "Wal-Mart is very successful under these economic conditions. People really are reacting to lower prices, not just thinking about them."

Many of the latest rollbacks, which will be featured in this week's circular, focus on food and home, the Wal-Mart spokesperson says. Among the specials: A Super Bowl spread for 10 people for less than $50, including pizza, chicken wings, little smokies, chips, dips and soft drinks.

While the recent outpouring of bad news about the recession as well as President Bush's focus on economic stimulus have piqued consumer's interest in savings, the spokesperson says Wal-Mart shoppers have been responsive to value propositions as far back as September, with back-to-school shopping, as well as during the holidays. "Customers look to us to save, and that's especially true at specific times during the year." Nor does it appear that Wal-Mart will have to back off its value strategy any time soon. "This is going to be a lengthy cycle, perhaps lasting a couple of years," says economist Hastings. "If inflation picks up at the end of the year as some suspect, including myself, then the perceptions and the realities intertwine even further, sending more and more shoppers into lower-priced channels."

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