Retail giant Wal-Mart Stores, Inc. (NYSE:WMT) has intensified the competition this holiday season. The company has started offering seven big deals immediately after Halloween. It will be the shortest holiday season in several years, and in response Wal-Mart is giving more lucrative deals one month in advance. Retailers worry that fierce discounting coupled with weak consumer spending will result in the slowest spending rise since 2009.
Wal-Mart announces seven deals
U.S. retailers usually kick off the holiday shopping season on or a day after Thanksgiving. Traditionally, they save their best online deals for “Cyber Monday.” Since Thanksgiving falls on November 28 this year, there will be six fewer days between Thanksgiving and Christmas. Fewer shopping days prompted retailers to offer more incentives and start offering the deals early.
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The holiday season accounts for a large part of any retailer’s annual revenues. Analysts say this holiday season will be the most heavily discounted in several years, reports Dhanya Skariachan of Reuters. Wal-Mart Stores, Inc. (NYSE:WMT) recently announced the hiring of 55,000 extra temporary workers for the holiday season. On November 1, the retail giant is holding an event to announce the seven deals. The deals include a 10-inch XELIO tablet for $49 (compared to its original price of $100), and JVC LED TV for $299, a 36% discount.
Wal-Mart highly vulnerable to economic conditions
Though housing and jobs markets are recovering, they haven’t helped much to boost consumer spending so far. Wal-Mart Stores, Inc. (NYSE:WMT) is highly vulnerable to economic conditions because it mostly serves low-income shoppers. Online sales are expected to rise 13-15% during this holiday season. This time, Wal-Mart will be offering 5 million products online. The company also announced it would offer free shipping on 99% of its online products for orders above $50.
Wal-Mart Stores, Inc. (NYSE:WMT) expects its e-commerce sales to grow 30% to $10 billion this year, and $13 billion in 2014. That’s still a small percentage of its total sales of $486 billion. Wal-Mart also revamped its website so that it can handle any jump in traffic. In 2011, the company’s website couldn’t handle a sudden surge in online demand.
Wal-Mart Stores, Inc. (NYSE:WMT) shares were unchanged at $76.75 in pre-market trading.