By  on September 8, 2005

NEW YORK — Wal-Mart Stores Inc. is going to flash its teeth this holiday shopping season.

During a Prudential Securities Back-to-School Consumer Conference in Boston, Lee Scott, chief executive officer and president of Wal-Mart, said the retailer plans to be "extraordinarily aggressive" on price. At the same time, the retailer will continue to merchandise higher-priced goods.

Scott reminded investors that two years ago, when the company decided to be aggressive in toys, the retailer delivered strong margins in the category due to sell-throughs of inventory. It was a move that created traffic and customer loyalty, as well, he said.

"This year, we will be setting the pace," Scott said.

Also during his presentation, the ceo took issue with recent public campaigns against Wal-Mart, campaigns he said are "aimed at slowing this company down." Scott said there's a strategy to deal with the negative campaigns, but would not disclose any details.

Scott acknowledged that it's been difficult to reconcile how certain communities are against having a Wal-Mart with the number of job applications the retailer receives. For example, in Oakland, where the retailer faced opposition to a proposed Supercenter, Wal-Mart was swamped with 11,000 applications for 4,000 positions at the site.

Regarding the perception that only low-income people shop at Wal-Mart, Scott said consumers across all income levels shop the store. And increasingly, shoppers at Wal-Mart are buying higher-priced goods such as a branded digital camera that sells for $957 or a $600 camcorder, or even an LCD television that carries a price tag of $986. Scott also reiterated that it would not lose its opening price-point shoppers as it adds more higher-priced goods to the merchandise mix. According to Scott, the addition of pricey products better defines the different segments of its consumer base.

On the apparel side of the business, Scott said its George line is showing signs of improvement, with the U.K. operation taking a leadership role in styling and design.

To better understand its consumers, Wal-Mart also is watching consumer shopping patterns closely. The retailer is gauging the willingness of shoppers to spend on discretionary items at the beginning of a month, and how that tapers off toward the end of a paycheck cycle.Scott also said there's been too much emphasis by Wall Street on same-store sales results. Wal-Mart can profitably operate two stores in a geographic area even if comps decline initially at the older store. Even as some sales shift to the new store, Scott said the loss in comps at the mature store is outweighed in the long run by the gain in overall market share profitability.

As far as Hurricane Katrina is concerned, Scott said the retailer has contributed more than $20 million to relief efforts. He said the Walton family also has contributed millions to several relief efforts, including an $8 million donation to a presidential fund, which is headed by former presidents George H.W. Bush and Bill Clinton.

Scott said about 15 stores remain closed, most in and around the New Orleans area and a few in or surrounding Gulfport, Miss. A total of 126 stores were closed during the peak of the storm. Of those, 89 sustained some damage. In total, about 15,000 associates were impacted by the hurricane. Some of the sales associates who were forced to relocate have found work at another Wal-Mart store.

"The most important thing for them [is that] they had a sense, since they had a job, that their life will be back to normal," Scott said.

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