Wal-Mart (WMT) Under Siege For Extravagant Ad Claim

Shoppers can save $700 billion a year shopping in Wal-Mart (WMT), according to the company. It actually can’t come up with facts to support that claim. Wal-Mart would have to know where people who did not come to its stores shopped instead. Some of the people may have skipped shopping completely because the recession has cut so severely into their buying power.

A consumer group says that the Wal-Mart claim is simply bogus and wants the company to dispense with it. According to The Wall Street Journal, “The National Advertising Division of the Council of Better Business Bureaus made the recommendation Monday.”

Wal-Mart’s problem is that the advertising campaign may make good marketing sense, but that it is the only sense that it makes. Wal-Mart would have to have minute-by-minute information on every one of its shoppers, what they buy in its stores, what the items would have cost at competing stores, and whether people would have bought them if they could not get equivalent prices outside of Wal-Mart.

Wal-Mart’s marketers are going a long way toward spoiling a good thing. Wal-Mart is outselling all of its competition by posting increases in same-store sales while most other chains are posting declines. It is obvious to nearly everyone, both investors and consumers, that Wal-Mart has significant advantages based on pricing. Overreaching those facts only makes the chain look  sinister.

Wal-Mart can quit while its ahead and keep itself of the radar that detects outrageous claims.

Douglas A. McIntyre