Wal-Mart shoppers got another early Christmas present on Friday when the world’s largest retailer cut prices on appliances a week after slashing them on electronics and before that, toys.
Wal-Mart Stores Inc. — worried that holiday sales could be sluggish — has been aggressively slashing prices in a strategy that many of its rivals seem likely to follow, turning a boon for consumers into what may be a bane for retail profits.
On Friday, Wal-Mart announced discounts ranging from around 7 percent to 17 percent on roughly 50 small home appliances, including GE microwaves and programmable coffee makers. The prices are effective immediately through Christmas, a company spokeswoman said.
It is the third round so far of holiday discounts at Wal-Mart, which it calls rollbacks. Last Friday, Wal-Mart cut prices on almost 100 electronics items, and in October it introduced discounts on more than 100 toys.
“Wal-Mart will continue to roll back the prices of toys, electronics, apparel and more this holiday season to ensure that shoppers can find the season’s best merchandise at one destination at the great prices,” the Bentonville, Ark.-based company said in a statement.
Senior retail analyst Richard D. Hastings with Bernard Sands said Wal-Mart’s discounts could trigger a price war with such rivals as Target Corp., Circuit City Stores Inc., Best Buy Inc., Bed Bath & Beyond Inc., Toys R Us, Linens N Things, Sears Holdings Corp. and Amazon.com.
“The bigger issue to watch is whether this deflationary wind keeps blowing after the holiday season is over, since it is typically difficult to return to ordinary pricing when shoppers get hooked on a lower price level,” Hastings wrote in a research note.
The discounting moves have come after Wal-Mart reported disappointing October sales and the weakest November outlook in a decade.
Chief Executive Lee Scott told analysts last month the chain would refocus on selling basic items and price rollbacks after a year in which Wal-Mart went too far in stocking many trendy items, including its new fashion line, Metro 7.
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. It forecast flat sales in November.
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.