From squishy garbage-themed collectibles The Trash Pack to remote-controlled flying fish Air Swimmers, Toys R Us is carrying a larger assortment of exclusive toys to win holiday shoppers from the likes of and Wal-Mart Stores .

The world's largest toy retailer will also spend more on television advertising and make a bigger push to sell online during the holidays, CEO Jerry Storch told reporters at Toys R Us' flagship store in New York on Wednesday.

The plans came less than a week after discounter Wal-Mart said it was cutting prices on dozens of toys to $15, and resuming its layaway plan for toys after a five-year break.

We talk within our company about playing to win. We are not playing just to defend against them. We want to beat them. There is no doubt about that, Storch said of mass merchants such as Wal-Mart and Target Corp .

Toy stores took market share from mass market discounters in the 2010 holiday quarter, data from NPD showed. Toy stores picked up one-half a share point, while the mass merchants and discount retailers lost 3 share points.

Winning over shoppers may be tougher this year.

More than a quarter of Americans expect to spend less during the 2011 holiday season, a survey showed, signaling that retailers must try harder to win shoppers.

It is certainly clear that any reasonable expectation would be that the economy will be sluggish for a long time to come, Storch said. That doesn't mean that we can't succeed.

Toys R Us is getting an early start to the holiday season, bringing out its first-ever catalog of Only at Toys R Us items this weekend.

The winter holiday season traditionally runs from the day after U.S. Thanksgiving through Christmas and is the most important time of year for retailers.

Toys R Us rings up more than 40 percent of its annual sales during the holiday season. This year's period is even more vital as the results will weigh on its plan to go public.

Toys R Us, which operates stores under its namesake brand, Babies R Us and FAO Schwarz, filed for an IPO of up to $800 million in May 2010. But it is not expected to go public until 2012, two sources told Reuters in early July.


Toys R Us plans to step up promotions on its web site and Facebook and carry more products online to appeal to parents who want to avoid heading into crowded stores.

I am a huge believer in the Internet, Storch said.

Toys R Us, which saw its e-commerce sales rise 30 percent to $782 million in 2010, recently invested in a new distribution center in Nevada equipped with robots to reduce turnaround time for online orders.

The focus on e-commerce is one reason Toys R Us is opening fewer temporary U.S. stores this year. Last year, it opened about 600 temporary stores, more than six times what it opened in 2009. This year, it will open between 90 and 600.

Still, Storch sees seasonal hiring close to last year's level. The company, which hired 45,000 seasonal workers last year, has not yet finalized its hiring numbers.

(Reporting by Dhanya Skariachan)