Walmart, Toys R Us price war could forecast a harsh holiday in Toyland
Filed under: Company News, Economy, Wal-Mart Stores, Target Corp.
In yet another sign that this year's holiday season will be fought hard in the toy aisles, both Walmart Stores (WMT) and Toys "R" Us announced expanded promotions for holiday shopping.Walmart will cut prices on another hundred toys, including more additions to its 100-toys-under-$10 lineup. It cut the prices of popular board games like Candyland and Yahtzee to $5, and marked down popular toys, including the Bakugan starter pack (now $8) and Star Wars light-sabre (now $15). The retailer also announced it will offer free shipping on all online toy orders picked up in-store, including bikes and scooters.
Toys "R" Us chain Babies "R" Us will offer a holiday sale until just before Thanksgiving, to mark the opening of the pop-up Toys "R" Us Holiday Express shops. Discounts include a $10 gift card with each $75 toy purchase, and discounts and gifts with purchases on items by Crayola, Fisher-Price, and other brands.
The 260 pop-up shops in Babies "R" Us stores -- plus another 80 standalone stores in shopping malls -- are fronts in this year's hard fight toy-retail war. Wal-Mart got out of the gate early with the $10 toy program in September, and expanded it after rivals including Target Corp. (TGT) matched its prices.
Toys "R" Us has ceded part of that fight, focusing instead on exclusive items and services. The chain also brought back layaway on some items, and trade-ins for old video games. Last month it opened FAO Schwarz shops within stores, carrying a small selection of exclusive toys from the fabled New York toy store.
The Toys "R" Us strategy may end up being a wise longterm plan. Walmart and Target can use the toys as a loss leader to drive traffic to other departments, but Toys "R" doesn't have such room to maneuver. Still, some experts warn that Walmart's price cuts may go too far and could bite back, both long- and short-term.
On the plus side, all these discounts come early in the holiday season, which experts call a trend this year. Retailers are putting out generous offers early, to encourage shoppers to start their holiday shopping before Thanksgiving, and to get the word out that inventories are thinner this year. There have even been some questions about merchandise shortages -- but with no hot toys this year, that's not expected.
When October retail sales figures come out tomorrow, we'll know if the early-sales strategy has had an effect. Reuters reports that figures are expected to show momentum building towards the holiday but warned that recovery is still iffy. The real test will come after Black Friday -- the day after Thanksgiving, and the traditional start of the holiday shopping season. If we still see big discounts in toys as we go into December, brace yourselves for a harsh holiday in Toyland.



























Reader Comments (Page 1 of 2)
11-02-2009 @ 5:34PM
dajt57 said...
i buy my car wax at walmart once every 3 or 4 years. otherwise i never shop walmart. cheap stuff that breaks easy is not my idea of a bargain.
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11-02-2009 @ 8:12PM
dajt57 said...
i never shop walmart because i only shop at local businesses.
11-03-2009 @ 10:14AM
Bob said...
Every year it's the same: "News" sources write articles forecasting doom about the pending shopping season. Retailers will later complain that sales fell short of expectations. Watch and see, it's like the movie Groundhog Day. OK, let's move on to the weather: "2010 may be a record year for hurricanes..."
11-03-2009 @ 12:02PM
rozlyn said...
And why buy your car wax there? You are willing to spend double the price for everything else. You must be one of the lucky ones in this economy that has money to spend. I personally believe sir, that you are fibbing. If you bother to go into Walmart just to buy your car wax, you are buying other things as it would be just as easy for you to buy car wax at your local auto parts store. After all you only support your local businesses right?
11-02-2009 @ 7:07PM
gail said...
you need to bring layaway back in this day when people can afford a few bucks every 2 weeks or so instead of comming up with alot of cash all at one time thats why i shop at kmart use to do alot of walmart when they had layaway
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11-02-2009 @ 7:28PM
JMA said...
I'll rather wait for the Neiman Marcus Holiday gifts catalogue.
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11-02-2009 @ 7:53PM
bevsaves2 said...
yeah
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11-02-2009 @ 9:19PM
Sam said...
I will give my money to Toys R Us. Not Walmart. Walmart treats their employees like garbage.
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11-02-2009 @ 11:14PM
Don said...
I just today went to toys R Us and spent over $112.00 on christmas gifts. That was after getting my discounts on the stuff I bought. Thanks Toys r us for the $10.00 off coupon on my big book.
I will not be buying anything from walmart.
I have to go to walmart and work inside the store for the company i work for stocking the beer. It sucks.
I always say a CLEAN WALMART IS A UNHAPPY WALMART!!!!!
The 2 walmarts in my area are nasty!!!!!!!!!!!!!!!!!!
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11-03-2009 @ 12:14PM
Rozlyn said...
SO...Do you think you would get better treatment stocking toy shelves at Toys R US? I hardly think so. Stocking shelves anywhere is going to be a bad job. Minimum wage at best, no benefits. If you are expecting more perhaps you need to look into seeking out a better occupation.
11-02-2009 @ 11:16PM
Don said...
GO TOYS R US!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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11-02-2009 @ 11:52PM
Nosnobme said...
You must be thinking of K-Mart. Walmart carries Name Brand items all over the store and especially in appliances. Some of their clothes have gone down hill as far as quality, you're right but not for kids. You can get all the latest fads and trends and funky shoes too all for a good price that a lot of us depend on. I like my kids to look nice and they out grow their clothes long befor they show signs of wear anyway. Their DVD and CD selection is huge and they'll order for you. They have iPods, all kinds of phones. Walmarts Seasonal isles are always a lot of fun to shop. The Toy isles? full of everything you see in all the good stores. Bikes, skateboards, gear, sporting equipment. No, only a snob wouldn't see the value in Walmart.
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11-03-2009 @ 2:42AM
chris said...
Then i guess im a snob, a snob that cares about things other then saving 9 cents on an item like how a company treats their employees and how a company helps the economy and doesnt destroy it, the whole place is filled with china crap, the employees make nothing, the bennies suck and i could go on for hours, boo walmart, Toys R Us seems really nice every time i go in there and the employees seem to like it.
11-03-2009 @ 10:12AM
Lance Manly said...
nosnobme,
My main problem with Walmart is how few "Made in America" products they sell. I still go in their stores and look around when I need to buy something because they almost always have the product that I'm looking for, but probably about 75%-80% of the time it’s made in China. Aside from not wanting to buy Chinese products because I feel they are of inferior quality, and perhaps dangerous, I'd rather use my money to support American workers.
Obviously buying American is a little more expensive, and somewhat less convenient, but the way I look at it, you're buying better quality, and honestly, just go to a shopping center with a variety of stores, and after a while you will learn what stores have what products and the trips become easier.
I understand where people on a fixed income, etc... are coming from saying they love the value of Walmart. When I was still in college I loved it too! But now that I have some money coming in, I choose to use it to buy American products, if Walmart has them, then great; I'll buy. If not, o well, somewhere else will.
What you are neglecting to consider, nosnobme, is that for some people value is not the only deciding factor when they purchase goods. You deem these people to be snobs, but you are failing to consider the wide variety of reasons why someone could choose to avoid the store.
Just my two cents!!
11-02-2009 @ 11:49PM
Marion D. McCarty said...
I am a retired senior citizen on a fixed income and for me
and all my friends and family,WAL-MART IS THE ONLY WAY TO GO!
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11-03-2009 @ 2:47AM
chris said...
Really? a retired citizen on a fixed income commenting on a blog site? youre full of @$#%
11-02-2009 @ 11:53PM
Nosnobme said...
Oh, and every Walmart around my area is very clean with nice rest rooms. My only complaint is that they sometimes don't have enough checkers and you have to wait. It's worth it though. The value is there on Name Brands and all the Seasonal items are wonderful. Health and Beauty is all Name Brands too. Same exact stuff at the more expensive stores but half the price. Their return policy is second to none. If you don't like it, they'll take it back. Thank God for Walmart.
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11-03-2009 @ 2:52AM
chris said...
God has nothing to do with walmart, Sam Walton is spinning in his grave with how they treat employees and honestly who gives a crap about their clean restrooms (no pun intended) do you go there to use their bathrooms? comment on something that matters lol
11-03-2009 @ 12:56AM
L R said...
There maybe a fatality in this battle. The last financial report from Wal-Mart indicated a huge cash reserve available. There was also an insinuation that profits may not meet expectations. These people should not be underestimated.
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11-04-2009 @ 11:14PM
jusmemn said...
How about giving the kids a big hug and kiss, and tell them the truth about our state of affairs. Sorry no junk for Christmas this year!
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