Wal-Mart rolls out early holiday toy push

NEW YORK Mon Oct 1, 2007 9:42am EDT

A customer shops at a Wal-Mart in Chicago in a file photo. Christmas started in September this year -- at least in the toy aisles at Wal-Mart Stores Inc -- even as retailers worry that parents may approach toy shopping with trepidation this holiday season after massive numbers of toys were recalled in recent months. REUTERS/Joshua Lott

A customer shops at a Wal-Mart in Chicago in a file photo. Christmas started in September this year -- at least in the toy aisles at Wal-Mart Stores Inc -- even as retailers worry that parents may approach toy shopping with trepidation this holiday season after massive numbers of toys were recalled in recent months.

Credit: Reuters/Joshua Lott

NEW YORK (Reuters) - Christmas started in September this year -- at least in the toy aisles at Wal-Mart Stores Inc -- even as retailers worry that parents may approach toy shopping with trepidation this holiday season after massive numbers of toys were recalled in recent months.

So to jump-start holiday shopping, the world's largest retailer began cutting prices on toys in its stores on Sunday, September 30, and will be introducing special price cuts on hot toys each week during October.

"It's a little bit earlier and a little bit deeper," Laura Phillips, Wal-Mart's chief toy officer, said of the timing of this year's holiday toy promotions and the size of the price reductions.

For instance, this weekend Wal-Mart (WMT.N) cut the price on the Fisher-Price Kid Tough Digital Camera to $54.88 -- down from $64.88. The camera, aimed at children ages 3 and older, was one of last holiday season's hottest selling items.

The price cuts come as U.S. retailers gear up for the all-important holiday shopping season amid an uncertain economic environment.

Last week, Lowe's Cos Inc (LOW.N) issued an earnings warning, while Target Corp (TGT.N) slashed its September sales forecast, fueling concerns that the holiday shopping season will be one of the weakest in years.

The National Retail Federation has already forecast that U.S. holiday sales will rise at their slowest pace in five years.

The price cuts also come after millions of toys bearing the "Made in China" label were recalled in recent months mainly due to unsafe levels of lead paint. Lead paint has been linked to health problems in children, including brain damage.

Wal-Mart has already asked its suppliers to resubmit testing documentation for the toys it sells in its stores and has hired independent laboratories to conduct an average of 200 additional tests each day.

It is also looking to stock its shelves with more products made closer to home.

"We have increased our orders with a couple of made-in-the- U.S. suppliers," Phillips said, adding that those items, such as plastic cars and kitchen sets, should reach its stores in November.

Phillips said Wal-Mart has worked for a year to ensure it will have enough supply of the toys it is promoting to last through the holidays, although it is hoping the price cuts will convince shoppers to start their holiday toy shopping this month.

It will sell Hasbro Inc's HAS.N "Are You Smarter than a 5th Grader?" game for $10, down from $18.96, and it will offer the Razor Ripstik Caster Board, which is a cross between a skateboard and a snowboard, for $77.77 instead of $93.93.

At the moment, this year's holiday season lacks one dominant hot toy, like last year's T.M.X. Elmo from Fisher-Price, a unit of Mattel Inc MAT.N.

But Wal-Mart expects there will be some fresh excitement in the toy aisle in November when Fisher-Price introduces a new Elmo doll.

While Phillips declined to provide details on the newest version of Elmo, she said Wal-Mart has worked hard to make sure it will have an adequate supply of the doll to satisfy its holiday shoppers.

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