updated 10/24/2006 6:22:49 PM ET 2006-10-24T22:22:49

Wal-Mart Stores Inc. pledged Tuesday to revive sales growth in the coming holiday season after an unexpectedly weak October and said a barrage of criticism from union-backed groups was not driving away shoppers.

Wal-Mart Chief Executive Lee Scott also told Wall Street analysts and investors the company will not exit Japan, one of it s largest foreign markets, after selling stores in Germany and South Korea, where it was losing money.

Scott said October sales at stores opened at least one year were not acceptable. Wal-Mart told investors Monday that same-store sales this month were growing about 1 percent, short of its forecast of 2 percent to 4 percent.

“I would expect that as gas prices continue to level off, and as we implement our aggressive strategy across meaningful categories in the holiday season, that we will see stronger sales,” Scott said on the second day of an investor and analyst meeting in Teaneck, N.J.

“That is our expectation. It is not our expectation to proceed with 1 percent,” Scott said.

Scott blamed the October weakness on remodeling projects at many stores that disrupted business, poor execution of efforts to sell trendier women’s apparel and the fact that many shoppers who stayed close to home when gas prices were high were still avoiding longer trips to a Wal-Mart now that prices have eased.

Wal-Mart’s new executive in charge of communications, former Democratic political adviser Leslie Dach, told investors there are no signs that shoppers are being driven away by more than a year of concerted campaigning by union-backed groups to pressure Wal-Mart into improving pay and benefits for its workers.

Dach said Wal-Mart’s research showed the retailer is viewed favorably by about 70 percent of the public, a number that has not declined since he became involved with Wal-Mart last year. Dach was an executive with public relations firm Edelman when Wal-Mart hired the firm last year to help defend it against the union groups. Dach joined Wal-Mart in August.

“Anybody who watches politicians would know that these are numbers that any politicians would covet,” Dach said.

WakeUpWalMart.com, one of two union-funded groups campaigning for changes at Wal-Mart, said the fact that Wal-Mart created a new executive-level position for Dach to head its communications efforts showed the retailer was feeling heat.

“Wal-Mart, tragically, chooses to ignore the fact that anemic store sales, declines in store traffic, a collapsing public image, worker rebellions, a failure to attract new shoppers, increased public and political anger, proves that the failures to do what is right for its employees and America has become a clear and present danger to Wal-Mart’s future growth and success,” WakeUpWalMart spokesman Chris Kofinis said.

On Japan, Scott said Wal-Mart will remain there despite troubles at its 400-store subsidiary Seiyu, which posted a 54 billion yen ($465 million) loss for the first six months of this year after a 10.6 billion yen loss the same period the previous year.

Scott said Seiyu and Japan were entirely different from Germany, including having better store locations, more effective ways to do business and shopping habits closer to the retailer’s model.

“There is as much opportunity in Japan as there is in absolutely any country that we currently operate in,” Scott said.

Wal-Mart arrived in Japan in 2002 and increased its stake in Seiyu in December to 53 percent from 42 percent.

It has stuck with the Seiyu brand, familiar to Japanese, instead of using the Wal-Mart name.

Unlike its operations in South Korea and Germany, Wal-Mart has made significant investments in Japan, the world’s second largest retail market, setting up a distribution facility, introducing its computerized systems, remodeling stores and opening large-scale supermarkets, which had been relatively rare here.

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