Wal-Mart gets busy: More holiday price cuts
No. 1 retailer starts a third round of discounts, this time on name-brand home appliances.
NEW YORK (CNNMoney.com) -- Wal-Mart's holiday discounts are coming fast and furious. The world's largest retailer on Friday announced it is rolling back prices on about 50 name-brand home appliances.
Describing it as "the largest rollback for small home appliances in the company's history," the new price cuts come on things like stainless steel microwaves and programmable coffee makers from makers including GE, Hoover and Sharp.
Specifically, Wal-Mart (Charts) said it's offering a Hoover vacuum cleaner for $98, down from its original price of $112, merchandise, a Mr. Coffee 12-cup programmable coffee maker for $37.88 (down from $42.48), a Black & Decker Quick 'N Easy 8-cup food processor for $24.88 ($29.72) and a GE (Charts) limited edition microwave for $84 (from $98).
This is the third set of price cuts on thousands of holiday items. Wal-Mart's already cuts prices on more than 80 of the year's most popular toys and electronic gear.
Some analysts speculate that Wal-Mart's eagerness to be first out of the block to cut prices could be a sign that Wal-Mart merchants are nervous about hitting their holiday sales targets.
Wal-Mart, Target (Charts) and Costco (Charts) are among some of the big retail chains that posted weaker-than-expected sales gains in October.
Industry experts are betting these retailers will do whatever they have to to lure shoppers in November and December - two months that can account for as much as 50 percent of a retailer's annual sales and profits.
Marshal Cohen, chief retail industry analyst with market research firm NPD Group, thinks Wal-Mart quick price cuts aren't necessarily a sign of desperation, but part of its year-end strategy.
"Wal-Mart has learned its lesson from two holidays ago when they didn't discount heavily and lost crucial sales to the competition," Cohen said. "There's no way that Wal-Mart can afford to be in that position again and let others take the momentum."
Wal-Mart's getting very aggressive very early, he noted, adding it seems the company would rather be criticized for being too quick than being too slow.
"Wal-Mart can always change the pace later on.," he said. "Right now they're chasing sale volume over profits."
For budget-conscious consumers, the good news is that Wal-Mart has set the stage for a serious price war among discounters. Cohen expects low and mid-priced sellers like Target, J.C. Penney (Charts) and Sears (Charts) will offer some of the season's best deals.
"Everyone is planning to be very aggressive for Black Friday. After this weekend, retailers are going to take stock of their sales schedule and Wal-Mart's actions and determine the next step," Cohen said.
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