Wal-Mart Stores Inc expects an extremely competitive holiday shopping season, but its treasurer said on Thursday that weekly price cuts are driving consumers to its U.S. stores and Walmart.com is seeing record hits after it slashed book prices.
Heading into ... the holiday season, everybody is gearing up, and it's never not competitive, so it's going to be extremely competitive, Treasurer Charles Holley told reporters on a press call.
Earlier in the day, Wal-Mart reported higher third-quarter profit but forecast earnings during the key holiday quarter that could miss Wall Street estimates.
Holley said what makes this year different is the economy.
Money and finances continues to be the No. 1 concern among our customer, No. 2 would be cost of living and No. 3 would be jobs, he said.
The retailer is cutting prices every week ahead of Christmas to win the business of the 140 million consumers who shop in its U.S. Walmart stores each week. Walmart has already reduced prices on TVs, toys, ground meat and bananas.
Walmart.com has also slashed prices on highly anticipated books, igniting a price war with Amazon.com, and it is selling its top 10 pre-order DVD movie titles for just under $10 each.
We've had very good response to the pricing that you've seen out in the market in the last three weeks, Holley said, adding: We've had record hits on our dot-com site.
When asked if Walmart.com had cut prices on those books and DVDs so low that it was losing money on the sales, Holley said: I wouldn't call them loss leaders because we don't plan to lose money. But it's kind of like the $4 generic, it's disruptive.
In 2006, the retailer shook up the pharmacy industry when it began selling some generic drugs for $4 per monthly prescription. Since then, Target Corp, Walgreen, CVS Caremark Corp, Rite Aid Corp supermarkets and others have introduced their own low-cost generic drug plans.
Holley said Walmart continues to see a surge in traffic in its stores on the first of the month, when shoppers get paid, and he said fewer consumers are using credit cards to make purchases due to a credit squeeze with consumers.
When asked about its interest in opening a store in New York City, Holley said he could not discuss specific real estate plans. He said the retailer has identified 15 metropolitan areas that have large potential, although he declined to name those areas.
He also said that while Russia is a very interesting market and the company continues to research it, the retailer had nothing to announce in terms of plans to enter that country.
(Reporting by Nicole Maestri; Editing by Phil Berlowitz)