A story out today from Advertising Age has an in-depth break down of Wal-Mart’s current business and marketing strategy. Most retailers are scrambling to stay afloat as the economy declines, but in the last month Wal-Mart has seen rises in both its stock price and profits.

Shoppers are trading down, and Wal-Mart is as low as they can go. A bad economy has always been good for Wal-Mart, and today’s recession-like atmosphere is no different. Wal-Mart’s execs claim the recent boost in sales is due to a “strategic three-year plan,” but most analysts agree: when the going gets tough, the tough go to Wal-Mart.

“But,” says one analyst quoted in the article, “there is a chink in the armor of Wal-Mart, which is these customers are not saying they necessarily feel loyalty.” Though more people are shopping at the low-price retailer, they’re not likely to stay. Wal-Mart’s only advantage is its prices: customer service, product quality and company ethics are all secondary objectives, and shoppers know that. Brand loyalty might not be a problem for Wal-Mart now, but once the economy improves the company could face the consequences for putting low prices above all else.

Wal-Mart Grinning Big Through the Tough Times [Advertising Age]

Looking for a silver lining in the economy? It’s shining brightly from Bentonville, Ark.

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Just one day after this release chronicling Wal-Mart’s continuing reputation problems and the impact they have on the company’s business, a new study from the UK shows Wal-Mart’s branding is struggling overseas as well.

The Superbrands Council conducts an annual poll surveying the top UK brands. According to the group’s website, “Every year we commission an independent research process that asks a panel of experts and thousands of consumers their opinion on literally every major UK brand.” The survey included a wide range of consumer brands and ranked them according to respondents’ impressions of the company.

Wal-Mart’s wholly-owned UK subsidiary, Asda, dropped a whopping 253 places since last year’s survey, and came in a lowly #439 out of 500 companies, directly behind Kentucky Fried Chicken.

As we mentioned yesterday, the company’s continuing reputation for low wages, employee mistreatment, unethical sourcing and environmental damage undoubtedly contribute to its low scores in surveys such as this. It’s in Wal-Mart’s best interest to improve its brand quality from the bottom up, raising wages for its lowest earning employees and taking responsibility for its social impact all along its production chain.

Google ‘UK’s top consumer brand’ [BBC News]
Official Top 500 Superbrands 2008/09 (PDF) [Superbrands]
Wal-Mart’s Reputation Problems Continue [Wal-Mart Watch Press Release]