Toys R Us Following Good Book’s Advice

Discussion
Nov 15, 2004
George Anderson

By George Anderson


The Christmas season is supposed to be about giving and doing unto others as you would have then done unto you. Well, it appears as though Toys R Us is taking this biblical lesson
to heart when it comes to “Always Low Prices” Wal-Mart.


In a market basket study conducted by Oppenheimer and Co., Toys R Us was found to have lower overall prices than its toy store killer competitor. In a cart of 62 toys selected
by the firm, Toys R Us’ prices were five percent below Wal-Mart’s.


A similar study of 75 items conducted by Harris Nesbitt Corp. found Toys R Us was 0.2 percent cheaper than Wal-Mart.


The aggressive pricing stance of Toys R Us has surprised some industry observers who believed the retailer would focus primarily on exclusive toy deals it has with a number of
manufacturers (see RetailWire 11/11/04, Toy Manufacturers Choose Sides).


Greg Ahearn, vice president of store marketing at Toys R Us, told the Washington Post the chain was not willing to cede the lowest price ground to Wal-Mart. Acknowledging that
Toys R Us “took it on the chin last year,” Mr. Ahearn added, “we want to be price-competitive and do it throughout the holiday season this year.”


Moderator’s Comment: Considering its exclusive toy deals and its sharp pricing on items both it and Wal-Mart sells,
do you think Toys R Us is ready to reclaim some lost market share in the toy category?


We know Wal-Mart is not just going to hang back and let itself be under-priced if it can help it. It appears, however, that consumers are going to be getting
a lot of toy bargains no matter where they shop this holiday.

George Anderson – Moderator

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