Wal-Mart Is Expanding Discounts As The Retail Price War Heats Up


In lieu of the signs of a growing price war taking place between top U.S. retailers, Wal-Mart Stores, Inc. (NYSE:WMT) has announced that it plans to make its discounted products offer even bigger this holiday season and might even expand its price-matching scheme to involve its online competitors as well.

Wal-Mart Stores, Inc. (NYSE:WMT) is preparing itself for its competition which it believes will be tougher than it was or just as tough as it was in 2013 when hefty discounts weakened earnings in the retail industry o it is getting prepared for it. During 2013’s holiday season, Wal-Mart’s profits plummeted and since then has shown six straight quarters of weakening or flat same-store sales.

Steve Bratspies, Wal-Mart’s U.S. operations executive vice president of general merchandise, told the media during a call a few days ago that sales were beginning to “heat up”, and he believed it would probably be at least as competitive as it was in the holiday season of 2013.

This Saturday has been set to start plans to include 20,000 “rollbacks”, or a 90-day discounted product, and though it did not reveal an equivalent number, Wal-Mart Stores, Inc. (NYSE:WMT), said the scheme would be bigger and comprised of a bigger range of merchandise, with special focus on electronics and toys, than the holiday season last year.

In the meantime, rivals have also been working on stepping up their promotions and have been focussing on drawing more online customers. In fact, Target Corporation (NYSE:TGT) declared it would wave off  its shipping fees for orders made online during the period October 22-December 22, while Wal-Mart Stores, Inc. (NYSE:WMT) announced its plans to give free shipping for online purchases of a designated list with 100 gift objects, though it normally provides fee shipping for items over $50.

Bratspies also told the media that Wal-Mart Stores, Inc. (NYSE:WMT) was thinking of expanding a price-matching scheme for local bricks-and-mortar competition to encompass online comparisons, which would include it matching its prices with Amazon.com, Inc. (NASDAQ:AMZN) along with supermarkets and local retailers, though a final decision is yet to be made.

Customer Growth Partners (CGP), a research firm, foresees an aggressively competitive holiday season and forecasts spending may increase 3.4%, a slight increase from 2013’s 2.9% growth, which was the lowest growth since 2009.

Craig Johnson, president of CGP, said demands were slow-moving and consumers cross the board wanted value for their money, so this Christmas was going to be very promotional. However, he also expected Wal-Mart Stores, Inc. (NYSE:WMT) to gain back same store-sales earnings during the fourth fiscal quarter of 2014, aided by consumer electronics increasing demand, food inflation and putting labor back into stores to tackle long checkout queues and stock shelves better.

Wal-Mart Stores, Inc. (NYSE:WMT) said its focus was on hiring an additional 60,000 workers, up from 10% in 2013, and its goal was to have all of its stores’ cash registers operational during peak hours.