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Wal-Mart to cut prices after poor holiday sales

Wal-Mart Stores Inc. Tuesday signaled it will cut prices through Christmas after holding back deep discounts on the first weekend of the holiday shopping season.
/ Source: Reuters

Wal-Mart Stores Inc., the No. 1 U.S. retailer, Tuesday signaled it will cut prices through Christmas after holding back deep discounts on the first weekend of the holiday shopping season.

Wal-Mart has cut its November sales forecast, citing low traffic in the last week of the month and disappointing sales on Black Friday, the day after Thanksgiving that is one of the year's biggest for retailers.

The retailer said a "more balanced" approach to discounting than in previous years that Friday — called "black" because retailers used to move into profit then — had dampened sales.

"We are disappointed with our sales performance for the Friday after Thanksgiving and the full weekend," Wal-Mart spokeswoman Sharon Weber said.

The Thanksgiving-to-Christmas holiday season accounts for about 23 percent of annual retail sales.

"While our prices were generally as low as they have ever been, our competition was even more aggressive. We have learned from this and will move quickly to respond to what our customer has told us during the rest of the holiday season," she said.

She had no details of how Wal-Mart, known for its low prices, would implement these changes or what new advertising strategies it might use.

Wal-Mart will release November sales figures at U.S. stores open at least a year on Thursday.

But the Bentonville, Arkansas-based retailer on Saturday cut its November forecast, to a rise of just 0.7 percent from a year ago compared with a previous estimate of 2 percent to 4 percent growth.

Weber said the company stood by its forecast for fourth-quarter earnings of 73 to 75 cents a share on sales growth of between 2 percent and 4 percent.

Wal-Mart shares, which fell 4 percent on Monday, extended losses by another 77 cents, or 1.45 percent, to $52.38 on the New York Stock Exchange at midday.