Rhetoric v. Reality: Wal-Mart’s 2007 Holiday Sales

Despite some random, recent assertions that Wal-Mart is on the right track and may outperform Target for the 2007 holiday season, Wal-Mart’s business model remains unsustainable. Since 2000, Wal-Mart‘s pattern of strategic mistakes has led to flat stock performance, anemic same-store sales growth, reduced U.S. expansion, reputation problems and lack of confidence in the company’s leadership. To misconstrue a single, albeit successful holiday season’s sales result in the midst of an economic downturn into an indication that Wal-Mart is on the path to a turnaround is a serious mistake. The following information measures rhetoric against reality.

RHETORIC: "There's no doubt that Wal-Mart is back," said Craig Johnson, president of retail consultancy Customer Growth Partners. [CNN Money, 12/28/07]
FACT: Craig Johnson is a former partner at Interpublic, which counts the Martin Agency as one of its members. According to a Reuters article from early last year, the acquisition of Wal-Mart’s estimated $580 million dollar advertising account caused Interpublic’s stock to surge “as much as 4 percent with word of the decision that
keeps the Wal-Mart account with the world's third-largest advertising group, even though it will be handled by a different agency within the company.” [Reuters, 1/12/07]

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