Wal-Mart (WMT) cuts toy prices, kicks off holiday shopping early


Wal-Mart Stores, Inc. (NYSE: WMT) has started the holiday party early by dropping prices on an assortment of products in the toy aisles. Wal-Mart has been trying to get past its low-cost image, but this won't help. It wants to be known for more than being a discount retailer, but here we are again with the retailer leading the charge to a low-price showdown with the competition. The holiday season is approaching, of course, so perhaps that is a little too harsh. Dropping prices is the name of the game when it comes to the annual holiday shopping season, no matter who you are, right?

Although massive toy recalls have been (and continue to be) in the news, perhaps Wal-Mart wants the public to forget about all that and come on in for some three-months-in-advance savings on those holiday toys. In addition to the toy price cuts which took effect yesterday, the retailer is said to be cutting prices on more toys every week in October, so madness will reign in toy aisles this month. Be prepared to shove some elbows for those Barbies, okay?

It seems that the uncertain economic environment is already filtering down to retailers. Wal-Mart is already in a precarious position for the current quarter after seeing profits and same-store sales tumble since late 2006. Target Corp.'s (NYSE: TGT) announcement that September sales will fall just adds fuel to the fire. Add that to the report from the National Retail Federation that claims that U.S. holiday sales will rise at their slowest pace in five years, and there you have it -- Wal-Mart starts going nuts with the pricing guns in the toy aisles. Check back in January and we'll see if it worked.

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