Toy-store giants slash prices for holidays

Tthe annual battle to win the dollars of toy-buying parents is already off to a fierce start, according to a report in The Wall Street Journal.

Discount retail giant Wal-Mart is slashing prices to keep rival Target from becoming the low-cost leader this holiday-shopping season.  And Toys R Us has launched a mobile coupon service to entice shoppers.

Until recently, Wal-Mart had priced its toys higher than those advertised by Target. But shortly after the Journal asked Wal-Mart recently about its price disadvantage, the company issued a new price list, slashing the sticker on many hot toys, the newspaper reports.

Wal-Mart's new toy prices now beat Target's prices by just a few pennies, but there are still some significant price differences between the two retailers.

For example, Wal-Mart is selling a Barbie doll embedded with a video camera for $39, or $6 less than Target. But Target has priced Stinky the Garbage Truck -- a Matchbox truck that tells jokes -- at $49.99, after a coupon, or $6 less than Wal-Mart.

Consumers shouldn't lose out because both retailers say that if a shopper presents them with a print ad featuring a lower price, they will match it, the newspaper notes.

Toy sales are key to retailers' success during the holiday season because, no matter how the economy performs, parents will still buy stuff for their children, the Journal said. This year, with the economy somewhat improved, retailers hope they can lure shoppers with toy deals and encourage them to make other purchases.

Instead of price slashing, Toys R Us has enhanced its smart phone promotions. As part of these enhancements, the company has adopted a coupon bar code scanning technology in Toys R Us@ and Babies R Us@ stores across the country and has implemented a mobile messaging program, presenting on-the-go shoppers with the ability to receive exclusive text message offers directly to their mobile phones. These innovative services are now available to Toys R Us and Babies R Us shoppers nationwide.

Both Wal-Mart and Target are competing on prices to draw in shoppers, but Target may have the edge this holiday season, according to the Journal.

Target shoppers get an extra 5 percent discount on all purchases, including toys, if they pay with a Target credit or debit card or the Target Visa card. Far fewer Wal-Mart customers use credit cards of any sort, the report adds, and Wal-Mart's Discover Card gives buyers just 1 percent back on purchases.

Target has put half of its 2,000 toys on sale this year, an increase of about 10 percent from 2009, the Journal said. And though Wal-Mart has shrunk its toy section by 30 percent in recent years, this year its toy-oriented circular for newspapers has more than quadrupled in size and runs to 52 pages.