September 12, 2013 / 1:27 AM / 4 years ago

Walmart U.S. banks on kids' picks for holiday toys

NEW YORK (Reuters) - Wal-Mart Stores Inc (WMT.N) expects competition in the toy aisles to be so tough this holiday season that it has turned to the experts in the field: kids.

The largest U.S. retailer brought in more than 1,000 children this year to test toys and rank their favorites, Walmart U.S. CEO Bill Simon told Reuters on Wednesday. He said the toys category is likely to be the one that sees the biggest pricing pressure this holiday season.

During an interview at the Reuters Global Consumer and Retail Summit that covered a variety of topics ranging from consumer sentiment to healthcare and manufacturing, Simon appeared hopeful about Walmart’s ability to adapt to the changing environment for retailers.

U.S. consumers are figuring out how to “find a way to navigate” through a continued difficult economy. While the payroll tax increase and other concerns cause people “to pause and think about what they’re spending,” Simon said that he continues “to be amazed by the resilience of the consumer.”

“I think customers are going to shop for Christmas and Halloween, Thanksgiving, just like they always did, and they’re going to figure out in between how to make it up,” Simon said.

Walmart U.S. stores are ready to kick off Thanksgiving weekend sales “whenever we need to go.”

Last year the company’s first major offers were made at 8 p.m. Thanksgiving evening.

“We think it’s important to be first and we’re ready to go any time,” he said, speaking at the summit in New York.

Walmart U.S., the biggest unit of the world’s largest retailer Wal-Mart Stores Inc, expects its sales to improve in the second half of the year after the chain posted declines in sales at stores open at least a year - better known as same-store sales - in both the first and second quarters.

Walmart has already stepped up its e-commerce efforts as it battles Inc (AMZN.O) and other retailers by using its thousands of bricks and mortar stores across the country.

For example, it already ships more than 10 percent of orders sent to customers’ homes directly from its stores rather than from distribution centers, and that percentage is expected to grow, Simon said.

Another advantage of having stores that can fill online orders is that Walmart customers can order gifts online and pick them up in stores as late as Christmas Eve, with no last-minute shipping fees.


    While discounts are expected in the toy aisles, Simon does not expect many deals on “hot electronics” such as the new Xbox One by Microsoft Corp (MSFT.O) and Sony Corp’s (6758.T) PlayStation 4.

    Walmart U.S. has already seen “pretty good” presales of both of those gaming systems, he said. This is the first holiday season in several years with highly anticipated gaming systems coming to the market. Electronics retailers from Walmart to Best Buy Co Inc (BBY.N) are eager for hot gifts after items such as 3D televisions were disappointments.


    Walmart is the largest employer in the United States besides the federal government. Last month, it announced plans to add coverage for workers’ domestic partners.

    The company is not making any big changes to its healthcare coverage, Simon said, even as other companies do so ahead of the upcoming January implementation of the Affordable Care Act. Some Fortune 500 companies have started to cut back on certain benefits as they look to reduce healthcare costs.

    United Parcel Service Inc (UPS.N) told non-union employees that their spouses would no longer qualify for company-sponsored health insurance if they could get coverage through their own jobs. Other companies, such as IBM (IBM.N), plan to move U.S. retirees off its company-sponsored health plan and shift them into new private insurance exchanges. Walmart does not offer healthcare coverage to its retirees.

    Follow Reuters Summits on Twitter @Reuters_Summits

    (Replaces “For example” with “Other companies” in last paragraph)

    Additional reporting by Dhanya Skariachan and Phil Wahba in New York; editing by Matthew Lewis and Phil Berlowitz

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