Toy Seller Isn’t Playing Children’s Games : Retailing: Toys R Us sets the pace for holiday shopping season with a major coupon promotion.

The opening salvo in a potential holiday season toy price war has been fired by Toys R Us, which will offer a coupon book of discounts.

But toy retailers, whose numbers are shrinking, will not offer discounts on the hot toys, analysts predict.

In an effort to get shoppers ever earlier into toy stores for holiday purchases, Paramus, N.J.-based Toys R Us Inc. said it will offer $419 worth of coupons, good during November.

Charles Lazarus, chairman and chief executive officer, said the coupon catalogue required a lot of cooperation between toy manufacturers and Toys R Us. He said the coupons offer discounts from $2 to $25 on a variety of products.

The coupons will be inserted in newspapers next Sunday and are expected to reach 52 million households.

This is the biggest promotion Toys R Us has had. Last year it printed 6 million flyers with $313 in discount coupons. But, as in 1992, the current coupons will not affect the hottest toys.

One industry observer said that only about 2% of toy coupons are generally redeemed.

But Toys R Us said it expects coupon use to account for $500 million, or 15% of the company’s business in the fourth quarter.

After the demise of Lionel Kiddie City and Child World, toy retailers enjoy less competition.

But Toys R Us has to watch major discounters that are increasingly active in toys sales. Bentonville, Ark.-based Wal-Mart, the world’s biggest retailer, and Troy, Mich.-based Kmart Corp., which is No. 2, are the other big national players. While no one on the retailing side is using the phrase price war, the lines are drawn.

From Wal-Mart, spokesman Trey Baker said that the company will continue “to have prices that are lower than Toys R Us and other national competition.”

And at Kmart, a spokeswoman said that the retailer “will have an aggressive ad program in the weekly ad circulars.”