May 30, 2007 / 7:30 AM / in 11 years

Wal-Mart report questioned strengths: report

NEW YORK (Reuters) - A report prepared last year by Wal-Mart Stores Inc.’s (WMT.N) former advertising agency said some of the world’s largest retailer’s key strengths such as low prices and one-stop shopping were working against it in areas it wanted to grow in, a copy of the report in the New York Times said.

Wal-Mart is not seen as “a smart choice” in categories like electronics, apparel, home decor, pharmacy and grocery, where “saving money and time are not the be-all, end-all drivers,” the report said.

“The truth is, our shoppers do not believe we are the smartest choice in the categories we need to grow,” it said. “They have other needs that competitive retailers are meeting better than Wal-Mart.”

The document, which was reported on by the New York Times and posted on the paper’s Web site, comes ahead of Wal-Mart’s shareholder meeting on June 1. It was given to the paper by, a union-backed group that is critical of the retailer’s wages and policies. spokesman Chris Kofinis confirmed that the report put up on the Times’ Web site was the one the group gave to the paper.

The report was prepared by Omnicom Group Inc.’s (OMC.N) GSD&M agency in the fall of 2006, Kofinis said. A source outside the company gave the report to the group, he said. GSD&M lost the Wal-Mart account last year.

    No one at Wal-Mart could immediately be reached for comment. But the Times quoted spokesman Nick Agarwal as saying that the report was “out of date and, in some areas, it is just plain wrong.”

    Sales in the chain’s pharmacy, electronics and grocery departments, for instance, were very strong, the paper quoted him as saying.

    No one at GSD&M, which helped build Wal-Mart’s brand with campaigns like its smiley face and low-prices slogan, could be reached for comment.

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