This year the retail price wars have started before the busy Christmas shopping season at Wal Mart. The primary focus this time is on the $10 toy.
Last week, The Wal Street stores INC announced 10 well known toys which include some Barbie dolls and hot wheel car sets as well, all for $10. These stores make more than a fourth of U.S toys sales.
Wal Street has put up discounts in the stores to face competition and attract shoppers. Wal Mart is openly challenged by KB toys, which is one of the most well known and also the largest mall-based toy seller by stores. KB toys has already cut prices to $10 to be in the race. This is for more than 200 toys which include popular games and toys like Matchbox cars Hot Wheels sets, and of course Yahtzee.
Toys “R” Us Inc. and Amazon.com,Target corp. shares three of the four toys of the Wal Mart list of latest $ 10 toys and it is now seen in the price matching race.
The discounts of Amazon and its individual toy sellers were offset by shipping charges. Suppose, a Barbie mariposa costs $10, it has a shipping fee of $6.
The prices being low will encourage high volume staples for the coming Christmas season.M. Eric Johnson, who is professor at Dartmouth College keenly keep as tabs on the the toy business, said Wal-Mart is using cheaper toys to “get people into the stores, but not necessarily giving away the store. Supplies of the $10 toys are ample but scattered across store aisles”, he said.
He also said,”It feels more laser-focused, strategic kinds of moves to drive behavior, but not the good, old Wal-Mart that cuts prices everywhere,”. Still, any rival that follows Wal-Mart’s cuts on those toys “will definitely be losing money,”
In 2003 and 2004, Wal Mart reduced it prices drastically to capture a greater share of the toy sales which contrary to its price mechanism this year.
Wal Street has always been a part of aggressive competition. In 1998, Toys “R” lost its status as the nation’s largest toy seller by revenue to Wal-Mart.
Christmas will come, and parents will buy toys for their children, just like they have in all the 60 years Toys “R” Us has been in business,” said Gerald L. Storch the company’s chief executive officer who joined Toys “R” Us in 2006, “We know some customers will be stretched these holidays, and we plan to meet them. But value is not just about cheapness.”
