It is going to take more than simply low prices to make this a happy holiday selling season for retailers.
Industry experts speaking to CNNMoney.com said that Wal-Mart's disappointing sales results in October and previous months means the retailer is going to come out firing with price rollbacks designed to drive consumers into the store.
While Wal-Mart is doing its thing, it doesn't necessarily mean that all others should respond in kind with deep discounting of their own.
Stephen Hoch, marketing professor and director of the Wharton School's Jay H. Baker Retailing Initiative, said, "Retailers know that it's impossible to win the price war with Wal-Mart. If they do, they get their brains kicked in. Going head-to-head with Wal-Mart on prices will hurt them more in the long run than it will Wal-Mart."
Among those who should not feel rushed to meet Wal-Mart on its own turf are consumer electronics chains, such as Best Buy and Circuit City.
Goldman Sachs analyst Matthew Fassler said, "Mass merchants do not yet carry the assortments or offer the services to pose a serious threat to Best Buy and Circuit City in key product categories, most notably [high-definition] televisions."
Britt Beemer, retail analyst and chairman of America's Research Group, admires Wal-Mart's preemptive approach to the holidays with price cuts in categories such as toys and electronics. He doesn't, however, advise others to go rushing in after Wal-Mart.
"I think retailers will focus on the big sales item and not blanket discounts. In other words, they'll take some big items and feature blow-out sales on those," he said.
Burt Flickinger with the Strategic Resources Group, said Wal-Mart's approach is looking to bandage over some real issues affecting the company.
"In the next 50 days, its price cuts will give Wal-Mart a short-term volume boost but perhaps a long-term profit problem. But when its new fiscal year starts in February, it'll be tough for the company to once again fight through its old problems," he said.
Discussion Questions: Do you agree with the premise that Wal-Mart is looking to "ignite a fierce price war this holiday season?" Is the environment right this year for retailers to forego much of the discounting of past years?