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Wal-Mart revving up for more discounts?
Company exec hints the retailer could get 'even more aggressive' in the last days to Christmas.
December 6, 2005: 1:39 PM EST
By Parija Bhatnagar, staff writer

NEW YORK ( - It has already won the battle for Black Friday shoppers. Now Wal-Mart seems intent on winning the pricing war this holiday season.


The world's largest retailer could be gearing up for another round of deep promotions similar to its post-Thanksgiving blitz during which Wal-Mart shoppers took advantage of special discounts on electronics items such as a $378 HP laptop computer, DVD players, toys, and DVDs and CDs.

"We said we will be aggressive this year," Scott McCall, vice president and divisional merchandise manager with Wal-Mart's toy division, said in a recent interview with

Although McCall declined to offer further details about the discounter's overall holiday promotional strategy in the final weeks leading up to Christmas, he did indicate that Wal-Mart wasn't done surprising consumers just yet.

"We don't want to tip our hand to our competition," McCall said. "In the last few days we will be equally aggressive or even more aggressive."

At some Wal-Mart (Research) stores, the juicy discounts on limited quantity of holiday exclusives like the HP laptop incited stampedes and fights on Black Friday, which traditionally marks the start of the holiday shopping season.

Burt Flickinger, retail analyst and managing partner of Strategic Resource Group, said Wal-Mart and other retailers have little choice but to offer an "unprecedented" level of discounts this year, particularly in the final week before Christmas.

"I think the promotions will set records in terms of the lowest prices ever seen on items such as high-definition plasma TVs, digital cameras, toys, jewelry and other hot holiday categories," Flickinger said. "November was good for Wal-Mart but not for everybody else, even with the big Black Friday sales. This will make retailers very, very nervous about December."

Sweet November sales for Wal-Mart

Sales at Wal-Mart stores open at least a year -- a key retail measure known as same-store sales -- rose 4.3 percent last month, helped by its robust Black Friday deals. It was a far better showing than the 0.7 percent gain for the same period last year.

But plenty of other retailers reported disappointing results despite the heavy price-cutting late in the month.

For some retailers, the November-December shopping months together can account for as much as 50 percent of annual sales and profits.

So if November was simply so-so, merchants are immediately under the gun to try and make up for the shortfall in December in order to preserve their profits.

"The last ten days will show massive promotions in the sectors that didn't do well at the start of the holiday season. This will be the department stores and weak specialty and discount retailers," said Howard Davidowitz, chairman of Davidowitz & Associates, a New York-based retail consultancy and investment banking firm.

He also anticipates more sales at Wal-Mart, adding that the retailer so far has only had a "fair" start to the holiday season. "They want you to believe it's great, but their 2 to 4 percent forecast for sales growth in December isn't fantastic," Davidowitz said.

"I think consumer spending will drop in the first quarter," he said. "There is job growth but consumers are not saving, there are tremendous credit card delinquencies, interest rates are rising and income growth isn't great. All this will hurt retailers and it will also challenge Wal-Mart."

Wal-Mart could not be reached for additional comment.  Top of page

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