Wal-Mart raising prices on toys, squeezing more out of holidays

Wal-Mart raising prices on toys, squeezing more out of holidays

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By Matthew Boyle
Wednesday, Dec 15, 2010

Dec. 15 (Bloomberg) -- Wal-Mart Stores Inc., the world's largest retailer, raised prices on hundreds of toys this month, squeezing more out of sales during the biggest shopping period of the year.

Wal-Mart managers in the U.S. received instructions to mark up an average of 1,800 types of toys per store, according to a company e-mail dated Nov. 30 obtained by Bloomberg News. The e- mail didn't disclose specific increases. The prices were changed "to better enable your store and the company to have a successful financial month," according to the e-mail.

The directive from Wal-Mart, which has about 3,800 U.S. stores, told managers to do the markups as soon as possible. The move may help Chief Executive Officer Mike Duke fulfill his October prediction that sales in U.S. stores open at least a year will be positive this quarter, after six straight drops.

"In previous years Wal-Mart has come out and hammered everyone with unbelievably low toy prices," said Eric Johnson, director of the Center for Digital Strategies at the Tuck School of Business at Dartmouth in Hanover, New Hampshire. "They stepped away from that this year, and after Thanksgiving their prices have crept back up."

The price increases were due to temporary discounts on products, including toys, that ended Nov. 30, Ravi Jariwala, a spokesman for Bentonville, Arkansas-based Wal-Mart, said in an interview. He declined to elaborate on the message's reference to a successful financial month.

from Washington Post