Wal-Mart Stores Inc., the world's largest retailer, is getting back into the Christmas spirit.

Two years ago, the discount chain substituted the word

holiday

for Christmas references, and encouraged store greeters to do the same, in line with other retailers' removal of

Christmas

from advertising and stores.

Now, after criticism from religious groups, Wal-Mart is getting back in the spirit. For the first time, the Bentonville, Ark., merchant is bringing Santas into its 3,407 stores. And, following an experiment at a few locations last year, the retailer has set up a "Christmas Shop" in each of its 1,500 outlets with garden centers.

"This is still a nation where the majority of the people consider themselves Christian," said Patricia Edwards, a Seattle-based portfolio manager at Wentworth, Hauser & Violich, with $13.4 billion in assets, including Wal-Mart shares.

Last month, Lowe's Cos., the Mooresville, N.C., home-improvement chain, apologized for referring to "Family Trees" instead of Christmas trees in a catalog.

Today, Wal-Mart is broadcasting a Christmas concert it produced by the Salvation Army brass band and its own choir that will air in stores along with remarks from Pastor Rick Warren, author of

The Purpose Driven Life

.

The retailer is also offering photos free of charge with a Santa Claus in stores on weekends through tomorrow. For families who can't afford pictures with department-store or shopping-mall Santas, the photos are "absolutely a huge traffic draw," Edwards said.

Wal-Mart's shoppers were "loud and clear" that they wanted more references to Christmas, spokeswoman Christi Gallagher said. "It's really just a direct response to what our customers have told us" in comments to store managers and on the company's toll-free phone number, she said.

Wal-Mart resumed using the word

Christmas

in stores and advertising in 2006, a year after the Catholic League for Religious and Civil Rights started a boycott in response to the retailer's approach to the holiday. The boycott ended after one day following an apology from the company, according to the New York group's Web site.

"The message that we're giving to spread Christmas in the stores is one that really resonates with all our shoppers, regardless of religious affiliation," spokeswoman Gallagher said. She said she wasn't aware of any negative reaction to the changes.

The American Family Association was among conservative groups that last year threatened a boycott of Wal-Mart stores after Thanksgiving and after the retailer joined the National Gay and Lesbian Chamber of Commerce.

The association, based in Tupelo, Miss., canceled the boycott after Wal-Mart said it wouldn't make contributions to "highly controversial" groups or issues. The association has also assailed retailers, including Wal-Mart, for omitting the mention of Christmas in stores and marketing.

This year, the American Family Association turned its attention to Lowe's, the second-largest home-improvement chain.

Lowe's received 119,000 e-mails last month after the association posted a message to members urging them to protest the retailer's use of the phrase "Family Trees" in a catalog, said Karen Cobb, a company spokeswoman.

Lowe's has always used

Christmas

in its marketing and wasn't trying to depart from that policy, Cobb said. Lowe's issued an apology.

"It was not our intention to try and be politically correct or to try to take the significance of Christ out of Christmas," she said.