Wal-Mart: Penny-pinchers want luxury

ROGERS, ARK. -- If the mood on Wall Street is grim, then consumers must be feeling even more bleak, right?

Fuel prices remain high, inflation has hit food prices hard and consumer confidence is down.

Yet Wal-Mart Stores executives said Thursday that the key for retailers is to look beyond the frustration to how families can have a good time even though their money isn't going as far.

Stephen Quinn, chief marketing officer, shared a stage with fellow Wal-Mart executives John Fleming, chief merchandising officer and Bill Simon, chief operations officer, at a retail trends conference held near company headquarters by the Sam Walton College of Business at the University of Arkansas.

Rather than assume that shoppers will flock to the lowest price items, Quinn said Wal-Mart customers are using the broad range of items available at the store to sustain their standard of living while still cutting back.

For instance, sales of Ben & Jerry's ice cream are up. On its face that seems strange, but the top-shelf ice cream is a bargain if it is replacing a trip to an ice cream parlor.

The same goes for high-definition TVs, which consumers are buying with the thought of spending more evenings at home. Likewise for food items, with more people eating at home and cooking from scratch.

Wal-Mart has streamlined its offerings in a way that emphasizes growth items yet still lets customers find items the company must stock to remain a one-stop destination, calling it the "Win, Play, Show" strategy.

For a win category, such as flat-panel televisions, Fleming said the company stocks a full range of the TVs, both online and in the stores.

While Wal-Mart is the country's biggest seller of denim, the company treats it differently, offering attractive prices but with only enough selection to sustain the play category. For the show category -- Fleming uses the example of hammers and measuring tapes -- the company keeps a limited line in stock.

That's a change from a few years ago, when Wal-Mart tried to keep a full range of products in all categories.

"That created a lot of chaos in the stores," Fleming said.

Quinn said the number of shopping trips that consumers make has been declining for the past 10 years, and the current economic woes are "speeding consumers up to where they were going anyway."

Fleming said more shoppers are at the stores in prime time and fewer in the early and wee hours. "They are absolutely changing their behaviors," Quinn said.

The emphasis on mothers -- women do about two-thirds of the family shopping -- is a focus in Wal-Mart advertising.

"We're going with the voice of Mom in our commercials," Quinn said.