Walmart’s price comparison ads: Good long-term strategy?

In today’s RetailWire discussion, panelists weigh in about whether the Walmart comparison ads running in markets across the country are working or not. While most consumers are skeptical about price comparisons, the campaign appears to be driving share for Walmart. I have mixed feelings about the long-term benefit of the tactic, although it’s certainly true to Walmart’s brand positioning:

There is a lot of “fine print” (at least in the newspaper versions of the Walmart vs. Roundys ads running in this market) that would cause skepticism about the campaign. In particular, it’s hard to tell (especially in the TV spots) whether Walmart is doing an exact comparison or cherry-picking the items on both “tape totals” to slant the outcome. If you read the disclaimers, you’ll see what I mean, but there is no doubt that the campaign is working.

There are a couple of possible responses: Publix has decided to push back on the price message, while other grocery chains try to stay “above the fray” by offering better service and more specialized content. But not responding at all is a passive (and losing) tactic.

One more issue: The price comparisons may be driving share in food and consumables but do not appear to be moving Walmart’s overall sales and margins in the right direction. The focus on the lowest-margin businesses in the store may be counterproductive in the long run.


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