My MIL says this to me sometimes, only she is a bit of a snob and is I think truly embarrassed to have a daughter-in-law who shops at "those" stores! Most of the time she is very nice but there are a couple of comments that still make me wince. Once I carried a bright blue faux leather clutch to a family wedding, and she and one of her nieces laughed when I told them it was from a discount place. And my husband wore a new shirt (an actual designer brand from a poncey department store) and she said "where'd you get that, Wal-Mart??" in a rather snide way.
But for the most part this sort of thing doesn't bother me. Wearing cheap clothes doesn't bother me at all -- the attitude that someone is inferior because they *do* is what bugs me.
I also have items that are from Wal-Mart and friends that have lasted for years, while more expensive items have not fared so well (M&S merino cardigan, I'm looking at you!).