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Wal-Mart sees 'huge' holiday rush
Vice chairman says No. 1 retailer is confident holiday season will be 'very good.'
December 8, 2005: 6:42 PM EST
By Parija Bhatnagar, staff writer

NEW YORK ( - Wal-Mart Stores vice chairman John Menzer said Thursday the discounter is confident it will have a "very good" holiday season this year and anticipates that sales "will be huge" in the final days leading up to Christmas.

In an interview with, Menzer said that although it's still early "very early," the retailer's aggressive holiday discounting enabled it to get off to a solid start on Black Friday, or the day after Thanksgiving, which typically marks the official start of the gift-buying period.

"We had very good price leadership and we will continue to be the low-price leader throughout the season," Menzer said. "We will continue to surprise consumers with our choices of holiday items, quality and value," he said.

Wal-Mart (Research), the world's largest retailer, last month logged sales at its stores -- a key retail measure known as same-store sales -- that were up 4.3 percent for November, at the high-end of its 3 to 5 percent growth forecast, versus a dismal 0.7 percent same-store sales gain for the same period last year.

For December, it expects same-store sales growth of between 2 to 4 percent. The November-December period combined can account for as much as 50 percent of some retailers' annual profits and sales.

Eager to redeem itself this year, Wal-Mart launched its "earliest and most aggressive" holiday campaign at the beginning of November. For the first time in its history, the retailer used celebrities -- such as singers Beyonce and Garth Brooks -- instead of ordinary folks in its holiday-themed ads.

Industry observers called it a deliberate move by the discounter as it tries to sell itself as a shopping destination for higher-income consumers.

Last week, another Wal-Mart executive indicated to that the retailer would "be equally aggressive or even more aggressive" with holiday pricing in the final run-up to the Christmas holiday.

Scott McCall, vice president and divisional merchandise manager with Wal-Mart's toy division, wouldn't offer further details but indicated that the retailer wasn't done surprising consumers just yet.

When asked about whether or not Wal-Mart shoppers can look forward to round two of deep promotions similar to its post-Thanksgiving "blitz" sale, Menzer said the six-hour doorbuster on Black Friday is a one-time annual event but that shoppers will see "some surprises" with other items and prices in the days ahead.

Meanwhile, said Thursday that it was having its "most successful holiday season to date" and expects total visits to the Web site to increase 60 percent over last year's holiday season. Additionally, the retailer's online unit said 2005 will be the "best year ever," with more than 500 million visits to the Web site. did not offer any information regarding its sales.

Black Friday fights

At some Wal-Mart stores, the juicy blitz discounts on a limited quantity of holiday exclusives, like a $378 HP laptop computer, incited stampedes and fights on Black Friday.

A few irate shoppers even sent angry e-mails to complaining that they waited on line for hours outside of a Wal-Mart store only to find that the store had 20 units of the HP laptop in stock.

"We'll make a correction of our errors for next year," Menzer said. "We have to do a better job in informing our consumers about how many of the blitz items we'll have in stock and which locations will sell them."

Menzer said he regretted the situation.

Despite Menzer's cheerleading for Wal-Mart, some industry analysts say Wal-Mart and other retailers have little choice but to offer an unprecedented level of holiday discounts.

"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," said Burt Flickinger, retail analyst and managing partner of Strategic Resource Group.

"November was good for Wal-Mart but not for everybody else, even with the big Black Friday sales," he said."This will make retailers very, very nervous about December."

Howard Davidowitz, an independent retail consultant, thinks Wal-Mart had a "fair" but not "great" 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, however, is hoping that gift card redemptions in January will help spur post-holiday sales even though Menzer acknowledged that the retailer was aware that inflated home heating and credit card bills would burden consumers at the start of the new year.

"Obviously, consumers see the newspapers everyday talking about heating bills," Menzer said. "We'll try to help our customers be more energy efficient. They can save on their energy bill by turning down the thermostat. But we'll also offer fantastic energy saving options to them like lower energy lighting bulbs."


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