Wal-Mart Plans $10 Billion in Price Cuts

Wal-Mart Stores Inc. said it will reduce prices by a combined $10 billion this year to draw shoppers and make good on its promise of everyday low prices. The cuts apply to clothing, sporting goods, stationery, seasonal items and other merchandise, and exceed the $6 billion in so-called price rollbacks for its fiscal 1998, which ended Jan. 31. Wal-Mart heavily advertises the markdowns to attract customers, hoping they’ll pick up additional goods while at the store. The lower prices come even as rising wages and the lowest unemployment rates in three decades spur consumer spending. Bentonville, Ark.-based Wal-Mart had sales of $137.6 billion last fiscal year, up from $118 billion the previous year. In its most recent newspaper circular, Wal-Mart advertised a price cut for a Hewlett-Packard Co. color printer to $149.87, down from $199.87. It also cut the price for a package of 10 candy bars to 97 cents, down from $1.18. Wal-Mart shares dropped 6 cents to close at $53.88 on the NYSE. The stock has risen by almost a third this year, topping the 7.4% rise in the broader Standard & Poor’s 500 index.