Santa hasn't even been tugged down Central Park West yet, and Wal-Mart (WMT) is already slashing its prices. The market among major retailers is intensifying, with many offering products as loss leaders in order to entice customers into the store (physical or otherwise) and boost their basket sizes. Along with Target (TGT) and Amazon (AMZN), Walmart is slashing DVD prices, the same tactic it's using with books.
Retailers are rushing to undercut each other this year, which is causing prices to spiral down quickly. When Walmart announced reduced prices on several titles to $10, Amazon followed at $9.99, with Walmart stepping back in at $9.98.
If the book market is any indication, the low prices won't last forever. Preorder prices have been low, followed by gradual increases as the books have reached shelves. Nonetheless, the retailers are taking shots to the chin with every hot title, now whether read or watched on television.
When consumer spending is in the tank, retailers have few levers they can pull. Historically, deep discounting on certain items as a way to increase basket size has been popular, and sacrificing near-term margins for market share gains can deliver returns when the economy recovers. For now, however, the goal has to be to turn in a market-leading holiday sales result -- that's the number that sets the tone for the year. And, with many retailers closing their fiscal years at the end of January, it's the last big chance to make the year look good.
Google's plan for netbook PCs moves higher into the clouds
Closing Bell: Stock bulls and dollar death (DDRX,GMCR, PEET, SBUX, EBAY, CI, TECD)
So long peak oil, here comes peak uranium
Add your comments