Wal-Mart Stores Inc. (WMT), the No. 1 U.S. retailer, on Tuesday signaled it will cut prices in the weeks before Christmas after a strategy against deep discounts backfired on the first weekend of the holiday shopping season.

The retailer said it had taken a "more balanced" approach to discounting than in previous years on the day after Thanksgiving — known as Black Friday (search), as it used to be the day that retailers moved into profit — but this dampened sales.

Wal-Mart has cut its forecast for November sales, saying traffic in the last week of the month was down and sales were disappointing on Black Friday, one of the year's biggest shopping days that kicks off the holiday shopping season.

"We are disappointed with our sales performance for the Friday after Thanksgiving and the full weekend," Wal-Mart spokeswoman Sharon Weber said.

"While our prices were generally as low as they have ever been, our competition was even more aggressive. We have learned from this and will move quickly to respond to what our customer has told us during the rest of the holiday season," she said.

She had no details of how Wal-Mart, know for its low prices, would implement these changes or what new advertising strategies it might use.

Wal-Mart will release November figures for sales at U.S. stores open at least a year on Thursday.

But the Bentonville, Ark.-based retailer on Saturday cut its forecast for November, now expecting sales to edge up just 0.7 percent from a year ago compared to an earlier forecast for sales to rise between 2 percent and 4 percent.

Weber said the company had not altered its forecast for fourth-quarter sales to rise between 2 percent and 4 percent with earnings of between 73 and 75 cents a share.

Wal-Mart shares fell 4 percent on Monday after the retailer cut its sales forecast, closing at $53.15 on the New York Stock Exchange (search).

The Thanksgiving-to-Christmas holiday season is critical for retailers, accounting for about 23 percent of annual retail sales.