Fred Harteis Business News - Holiday discounts: Few (besides Wal-Mart)

Fred Harteis Business News - Wal-Mart, on a weekly basis, is hacking away at prices on holiday merchandise. But are its competitors following suit? Not Yet.

On the contrary, industry analysts point out that the level of discounting this past weekend at retailers such as J.C. Penney, Kohl's, Sears, Best Buy and elsewhere looked "typical."

"Retailers aren't going to panic because of what Wal-Mart is doing," said industry expert George Whalin, CEO of Retail Management Consultants. "They already have their plans in place for the season and they want to stick to them."

Moreover, Whalin said retailers have made much better use of technology over the past few years to help manage inventory and design their merchandise assortment.

"If they have the right products, they won't need to flood the store with big sales," he said.

With two weeks to go until "Black Friday," the unofficial start of the holiday sales race on the day after Thanksgiving, department store operators on average are offering discounts of between 20 percent and 50 percent on categories such as clothing, footwear, home furnishing and jewelry.

At specialty stores, discounts are even leaner.

Wal-Mart, however, is the most aggressive it has been in years with holiday discounts.

The world's largest retailer embarked on a weekly pattern of widespread discounts on entire product categories. It has already cut prices on about 100 toys, electronics and, most recently, on more than 50 name-brand home appliances.

And it's promising more hot deals to come.

Some industry experts argue that Wal-Mart's slashing prices because it has to, not because it wants to.

The November-December sales months account for as much as 50 percent of merchants' annual profit and sales. Most retailers, including Wal-Mart, would much rather boost profit during that two-month period than chase volume.

The National Retail Federation (NRF), the industry's largest trade group, expects overall holiday sales will increase 5 percent this year, slower than last year's 6.1 percent increase.

Wal-Mart gambled two years ago when it decide not to offer big bargains on holiday merchandise in an effort to boost profit. It backfired. Many of its shoppers fled to competitors.

Source: Cnn.com

About Fred Harteis: Fred Harteis leads Harteis International.   Fred Harteis has a background in agriculture and has created many successful business ventures.