Wal-Mart, Target to do holiday battle with sub-$10 toys?

Posted Oct 2nd 2009 5:15PM by Brian White
Filed under: Competitive Strategy, Wal-Mart (WMT), Target Corp. (TGT)

Target Corporation (NYSE: TGT) and Wal-Mart Stores Inc. (NYSE: WMT) will be mortal enemies this holiday season after both seeing consumers close their wallets and purses last season. Although September job losses were worse than expected, the U.S. economy continues to gain confidence, regardless of market losses this week.

What will be the weapons of choice in this season's holiday retail market? Wal-Mart will be pushing no less than 100 toys priced at $10 or below, with some hot names like "Transformers" in that mix. At the same time, Target announced the same items for $11.99. Not quite the same, is it? With Wal-Mart's research indicating that many of its shoppers start budgeting for Christmas purchases by August, that puny $2 difference does indeed make an impact on millions of consumers.

Wal-Mart has cleaned up in retail this year as consumers flocked to the discount retailer for everything and anything in order to save a buck. But competitor KMart does not want to be left off the list and has announced 15 toys that will be priced $11 to $100, labeling this the "Fab 15." Still, Wal-Mart is setting the stage to roll over any and all pricing on similar products by the competition. And, if consumers are looking more financially optimistic this year than last, that doesn't mean they will be spending more. And, Wal-Mart will garner more of those dollars yet again.

Tags: Holiday retail, Holiday toys, inthenews, Target Corp., TGT, Wal-Mart, WMT