Retailer steps up price cutting
Wal-Mart Stores Inc. cut prices on small appliances including microwaves and coffee makers Friday, the latest in a series of markdowns aimed at luring customers during the vital holiday shopping period.
The world’s biggest retailer, which had lowered prices on key toys and electronics, also said it would offer “special values” on a holiday collection from its trendy Metro 7 clothing line, which posted sluggish sales in recent month.
The moves come as Wal-Mart looks for ways to reinvigorate growth after back-to-back months of disappointing sales.
Remodeling projects disrupted hundreds of its U.S. stores, and Metro 7 clothing sold poorly.
Wal-Mart executives told analysts last month that they were not satisfied with the recent sales performance but that they remained confident that aggressive price cuts would revive growth during the November-to-December holiday season, the biggest shopping period of the year.
The latest markdowns were taken on almost 50 small appliances and included a Mr. Coffee 12-cup programmable coffee maker for $37.88, down from $42.48, and a Sharp 0.08-cubic-foot microwave reduced to $49.88 from $54.88.
CIBC analyst Joseph Altobello said the price cuts were already factored into earnings expectations for Jarden Corp., which makes Mr. Coffee.
The Metro 7 women’s apparel prices included a faux fur vest for $19.94 and a leather jacket for $59.94.
Wal-Mart launched Metro 7 a year ago and reported strong demand when it was tested in a few hundred stores.
But sales have not met Wal-Mart’s expectations since it rolled it out to more locations, and the retailer recently acknowledged that it probably expanded too far, too fast.
Wal-Mart had lowered prices on products including plasma televisions and board games, raising concerns of a price war and pressuring shares of rival retailers.
The retailer said it would continue to roll back prices this holiday season and listed toys, electronics and apparel as the key categories.
Wal-Mart’s stock, which had fallen nearly 6% this month after disappointing October sales, rose 8 cents to $46.47 on Friday.
