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Business Title: Fearing Slow Holiday Sales, Wal-Mart Cuts Prices (This article may be an infomercial in thin disguise) ************************************************************* Fearing Slow Holiday Sales, Wal-Mart Cuts Prices The holiday shopping season is starting early this year. As in today. Expecting a grim November, Wal-Mart Stores said it would immediately slash prices on 100 popular electronics, abruptly rearranging the Christmas calendar for its customers and competitors. The drastic discounts on televisions laptops and cameras, traditionally reserved for the day after Thanksgiving, are expected to touch off a price war as discount rivals Target, Best Buy and Circuit City scramble to match the move. For Wal-Mart, the strategy represents a bold bet that it can save Christmas by single-mindedly stressing low prices, a message that has become clouded by efforts to carry higher-end merchandise. Over the past year, Wal-Mart had played down advertisements featuring its sword-wielding, price-slashing smiley face, replacing them with sleek-looking spots tempting customers to buy silk camisoles and 300-threat count sheets. But this season, the rollback (as Wal-Mart calls price cutting) is back. The sharp price cuts announced today — $500 off a Panasonic 42 inch HD plasma television (now $1,294) and $300 off a 37-inch Polaroid LCD television (now $997) — are the company’s second round of the season. It sliced the price of 100 popular toys, several by more than $20, on Oct. 18. At stake, for Wal-Mart, is billions of dollars in holiday sales. For November, the retailer expects zero sales growth at stores open at least a year, which would represent its weakest performance in nearly a decade. The retailer reported growth of just 0.5 percent in October, well below its competition. The numbers do not mean Wal-Mart is not growing — revenue is at record levels — but suggests that sales at existing stores are now growing at a slower pace “By focusing on price this holiday, Wal-Mart is putting its competitors at a real disadvantage,” said Bill Dreher, an analyst at Deutsch Bank Securities. Price cuts are by no means unusual to Wal-Mart — the company’s motto is “Always Low Prices” and employees visit rival stores every day to insure products are a few pennies cheaper. But the deep price reductions announced over the past several weeks resemble those put in place far closer to Christmas. And retailers are generally wary of kicking off the season too early with deep discounts, for fear of confusing consumers and eating into profits. But Wal-Mart executives clearly believe that by starting early, they can attract consumers who would normally begin shopping the day after Thanksgiving, the traditional start of the holiday season for retailers. The low-price campaign stands out for another reason: it contrasts sharply with the retailer’s emphasis on style and fashion during the past year, which has hit a rough patch. With Wal-Mart struggling to maintain the breakneck growth that defined its first 40 years, the company has tried to persuade shoppers to buy more than just cleaning products and food, areas it soundly dominates in the United States. The solution, executives believed, was to persuade customers to spend more money in the clothing and home furnishings departments, as shoppers do at Wal-Mart’s biggest rival, Target. Wal-Mart’s advertising reflected this shift, becoming sleeker and moving away from a single-minded focus on price. But the fashions Wal-Mart chose, from a pair of skinny jeans to a velvet jacket, did not win over customers and chief executive H. Lee Scott has said the retailer “moved too far too fast” with its style initiative. And so low price, that old standby for Wal-Mart, is suddenly front and center again for the retailer this holiday. “They know this works,” Mr. Dreher said. ************************** DON'T SHOP AT WALMART!!
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