LITTLE ROCK, Ark. – Wal-Mart Stores Inc. (WMT), stung by a lackluster start to the holiday shopping season, said Thursday it is launching a new advertising campaign to remind its customers of its low prices.
The world's largest retailer is starting the price-focused ad blitz Friday in newspapers, television and radio, said spokeswoman Mona Williams, and feature two dozen key items, mainly toys and electronics, on which the company is cutting prices. "That's what people are buying," she said.
Wal-Mart reported growth of a mere 0.7 percent for November in stores open at least a year and said its day after Thanksgiving sales were not up to expectation.
"We have great prices, and we are really beefing up our communications to make sure that we get that word out," Williams said.
On Thursday, the company advised that its same-store sales growth would be between 1 percent and 3 percent for December, but it left unchanged its fourth-quarter guidance of 2 percent to 4 percent growth. Same-store sales measures sales at stores open at least a year are considered the best measure of a retailer's health.
Williams would not say how much the company is spending on the new advertising. She said Wal-Mart is financing the ad buys from its existing advertising budget.
"This is money that is already in the budget, but for more generic holiday advertising ... showing the store experience," Williams said. "We have now diverted that money for item pricing advertising."
The company has customarily shunned ads printed on newspaper pages themselves, but Williams said the company is buying what's known as run-of-press ads to help get the company message out.
She said the company decided that emphasizing individual item prices "is a better way to deliver our price leadership message."
The company will also issue on Dec. 10 an electronic version of its circular, which will have a format that will allow for easy updates.
Williams said the 24 items in the ad being launched Friday will include a 7-inch portable DVD player, LeapPad (search), and Elmo toys, a Black and Decker jar opener and fleece loungewear sets for men and women. She would not reveal prices Thursday.
Prices on the items are being cut, some by as much as one third, Williams said.
As for how Wal-Mart found itself in a fix, Williams said the company opted against "tricks and giimmicks to lure customers in" on the day after Thanksgiving, content to rely on its status as "the price leader."
"Our competitors drew traffic in with a lot of one-day specials and gimmicks," she said. "We just think that long-term we don't serve our customers well by having 75 toys or 25 DVDs that sell out in the first 15 minutes."
Wal-Mart shares were up 27 cents to $53.09 on the New York Stock Exchange (search). Its low for the past 52 weeks was $50.50 reached last December.