Wal-Mart supersizes its $10 holiday toy program

SAN FRANCISCO Wed Sep 30, 2009 7:27am EDT

A new Wal-Mart store shows off the company's new logo in Loveland, Colorado July 21, 2009. REUTERS/Rick Wilking

A new Wal-Mart store shows off the company's new logo in Loveland, Colorado July 21, 2009.

Credit: Reuters/Rick Wilking

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SAN FRANCISCO (Reuters) - This year, Wal-Mart Stores Inc is supersizing its $10 holiday toy offering.

Last October, the world's biggest retailer cut its prices and began selling 10 popular toys for $10 each in its U.S. Walmart stores to win sales from early bargain hunting holiday shoppers.

This year, the retailer has ramped up the program and is offering more than 100 toys, including Barbie dolls and board games, for $10 each, throughout the Christmas shopping season.

The $10 assortment includes newly introduced toys, such as certain Transformers action figures and a Play-Doh burger builder set, as well as existing items, such as Monopoly and Connect 4, whose prices have been cut 20 percent to 50 percent.

"What we learned from last holiday was that price mattered more than ever," said Laura Phillips, the retailer's vice president of toys.

That is expected to be the case again this year as the retailer surveyed shoppers and found the No. 1 priority for mothers this holiday season is finding gifts that fit their budget, Phillips said.

The year-end holiday season is a crucial one for U.S. retailers and can account for 25 percent to 40 percent of annual revenue. But last year's holiday season marked the worst in nearly 40 years by some measures and early forecasts for the 2009 holiday season call for sales to be anywhere from up 2 percent to down 1 percent.

But Wal-Mart has been gaining market share amid the recession as shoppers seek out low prices on everything from food to paper towels to popular electronics.

Last year, Phillips said Wal-Mart sold out of its $10 toys because it underestimated how early its shoppers were in its stores, buying gifts for Christmas.

"About 70 percent of our Wal-Mart shoppers start their holiday toy shopping before Halloween and, in fact, about 20 percent finish by Halloween," she said.

So Wal-Mart spent the past year working with toy makers, such as Mattel Inc and Hasbro Inc to develop new toys or cut prices on existing items so it could stock a much wider selection of $10 offerings this year.

It said the $10 toy offering is the first of several programs it will announce in the next 12 weeks leading up to Christmas "to bring added savings" to shoppers.

(Reporting by Nicole Maestri; editing by Andre Grenon)

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