CHICAGO – Wal-Mart Stores Inc. (WMT) said on Monday it would promote key electronics such as flat-panel televisions, MP3 players, video gaming consoles and laptop computers as part of an aggressive holiday campaign.
Less than one week after the world's biggest retailer declared an early start to the holiday shopping season by cutting prices on more than 100 popular toys and games, Wal-Mart said it intends to be the lowest-priced retailer in gift categories such as electronics and jewelry as well.
Wal-Mart has expanded its offering of flat-panel televisions, bringing in name-brands such as Sony (SNE) and Samsung and stepping up advertising on prime programs including ESPN's Monday Night Football.
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Gary Severson, Wal-Mart's head of electronics and toys, said the company's surveys showed that it offered the lowest price on flat-panel TVs 88 percent of the time.
"We're working on that other 12 percent rapidly, believe me," he said at Wal-Mart's analyst meeting on Monday, adding that year-over-year sales growth was in the triple digits for flat-panel TVs.
In MP3 players, he said Wal-Mart was excited about the launch of Microsoft Corp.'s (MSFT) Zune music player and expected continued strong growth in the category.
"We've been through these launches a few times and we didn't bake all of (the gaming companies') projections into our sales because we anticipated some of the (supply) numbers coming down from them," he said.
In laptop computers, he said the retailer would showcase brands such as HP (HPQ) and Toshiba on its end-cap displays along the store's main shopping aisles.
Wal-Mart's aggressive push into electronics has raised concerns about increased competition for specialty chains Best Buy Co. Inc. (BBY) and Circuit City Stores Inc. (CC), and their shares have been under pressure in the past week, although both edged up on Monday.
Credit Suisse analyst Gary Balter said those concerns were overdone, noting that the specialty stores were better at explaining new technology and accessories, and providing services such as in-home installation.
"So when the stocks decline over the new improved Wal-Mart approach to consumer electronic selling, remember, there will be a Christmas, and we would expect our consumer electronic players to be a part of it," he wrote in a note to clients.
Wal-Mart's stock was up $1.74, or 3.5 percent, at $51.11 in late afternoon trading on the New York Stock Exchange after it announced plans to curtail U.S. expansion and spending.
Best Buy was up 15 cents at $55.33, after losing 4.3 percent over the past five trading days. Circuit City gained 38 cents to $27.43 on Monday, but has fallen 6 percent over the past five days.