NEW YORK – First toys, now electronics.
Wal-Mart, which began discounting its holiday toys in mid-October, announced on Friday deep price cuts on almost 100 electronics, setting the stage for price wars in advance of the holiday season.
The discounting move, which focuses on high definition TVs, cell phones and digital cameras, came a day after the world’s largest retailer announced disappointing October sales and a lackluster November outlook.
The discounts, or what Wal-Mart Stores Inc. counts as rollbacks, are effective through Dec. 31. They include such items as Panasonic 42-inch HD plasma TVs, slashed to $1,294 from $1,794; the Polaroid LCD HDTVs, reduced to $997 from $1,297; and Cingular C139 prepaid phones, marked down to $19.97 from $29.98.
In a release Thursday, Wal-Mart said it planned to “reinforce Wal-Mart’s price leadership position” in such areas as toys and electronics. Wal-Mart said that its move to cut prices on more than 100 holiday toys is already resulting in a “significant lift in unit volume.”
Given Wal-Mart’s size and dominance among U.S. retailers, the move seemed likely to be more bad news for its electronics rivals, among them Best Buy Co. and Circuit Stores Inc. Analysts are predicting slower sales growth this year for the consumer electronics industry as prices for products such as flat-panel TVs drop, markets for products such as digital cameras mature, and no big hits have cropped up.
Wal-Mart’s same-store sales in the U.S. for the four weeks ended Oct. 27 grew 0.5 percent, a figure that includes growth of a mere 0.3 percent at Wal-Mart Stores and 2 percent at Sam’s Club.
Analysts surveyed by Thomson Financial expected same-store sales to rise 1.5 percent.
Wal-Mart blamed the lackluster sales on a variety of factors, including a failed apparel strategy that went too trendy and a store remodeling program that it says disrupted business.
The company also said that its sales, which were measured against September 2005 figures, paled in comparison because the year-earlier results were bloated by a rush of pre- and post-hurricane shopping.
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