The discount-retailing behemoth is cutting prices on what it calls the "Top 12 Toys of Christmas" by 10% to 50%. That should put the squeeze on rivals Target
Wal-Mart currently faces considerable adversity as it struggles to energize slowing growth and to bring more customers into the fold. It must also confront the unhappy possibility that the housing slowdown will prompt consumers to cling more tightly to their cash, particularly those in Wal-Mart's traditional customer demographic.
I've also been wondering how the recent "China syndrome" of hazardous Chinese-made toy recalls might affect Wal-Mart and its huge stake in toy sales. Given Mattel's
Wal-Mart said that more price cuts on toys are forthcoming, and I doubt anyone will be surprised if it gets increasingly aggressive in pricing other popular holiday items like electronics as well. Given a perfect storm of challenges facing Wal-Mart, its aggressive price-cutting may hurt its short-term margins for the sake of driving sales and customer traffic. But in the process, it'll also give the Bentonville behemoth's competitors a real headache.