Following the precedent it set on Oct. 1, when it started cutting prices on toys, Wal-Mart has added 15,000 more items to its low-price offensive. The price cuts it's taking are 20% lower than the ones it featured last year (when it also launched a similar early bird price-slashing offensive). Wal-Mart also spread the word that more reduced prices are coming.
While Wal-Mart has always been known for its low prices, it has recently begun a new ad campaign that focuses on how consumers can "live better" through those inexpensive goods. It's claiming that its price cuts can help the average family save $652 between October and December.
Of course, this gives rivals like Target
However, an interesting recent Wall Street Journal article theorized that the era of Wal-Mart may be over. Consumer attitudes regarding retail are apparently shifting, with many shoppers choosing quality over price. I've agreed with the Journal's argument for quite some time. Given Wal-Mart's PR issues, and the occasionally ruthless methods behind its low prices, many consumers would rather shop elsewhere.
As with stocks, sometimes "cheap" is cheap for a reason, and it seems like many consumers are realizing the pleasures of shopping at retailers that emphasize eco- and community-friendly policies, treat employees well, and offer sterling customer service. (Costco and Whole Foods Market
Wal-Mart's certainly throwing its weight around with big moves like this. But I'm just not certain that these cuts are a sustainable strategy, and I doubt they'll bode well for Wal-Mart's long-term fortunes.
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