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Holiday toy price war is on

So far there's no clear leader in the annual race to be the 'must-have' toy.

By Karen Datko Nov 9, 2010 8:40AM

This post comes from Truman Lewis at partner site


It's beginning to look a lot like Christmas, as Wal-Mart, Target and Toys R Us maneuver to win the hearts, minds and credit cards of holiday toy shoppers.

Wal-Mart staged a pre-emptive strike on Target over the weekend, slashing some of its prices to within a few cents of Target's. But, hoping to be a moving target, Target is putting about half of its 2,000 toys on sale this year, double last year's number.


Perhaps the biggest weapon in Target's arsenal is the 5% discount it offers on all purchases made with a Target credit or debit card or the Target Visa card. Wal-Mart's Discover card offers only a 1% rebate.


Both big retailers have expanded the number of toys in their inventory this year. Wal-Mart had reduced its toy selection by as much as 30% in recent years but, with a slightly more robust economy this year, the retail giant is hoping its customers will dig a little deeper to stock their children's stockings.


Toys R Us isn't emphasizing price-cutting this year. Instead it is stocking a wider variety of toys and a broader selection of "exclusive" toys. It also offers a loyalty program that returns 10% on holiday purchases up to $500. The rebate is in the form of a store credit, not cash.


Retailers are hoping, as they do each year, that spending on toys will be a bright spot in an otherwise dim year. Cash-strapped, pessimistic consumers generally cut back on luxury items, home electronics and other big-ticket items but can usually be persuaded to pony up to spread holiday cheer among their children. Besides, toys are relatively cheap.



So far there's no clear leader in the annual race to be the "must-have" toy but, for the slightly older crowd, the elves at Microsoft may have finally connected with holiday shoppers. The Xbox Kinect, the company's motion sensor gaming platform, is generating a lot of buzz, or at least a lot of hype. (Microsoft publishes MSN Money.)


It's been reported that the Xbox has already sold out its preorder applications at many retail outlets, and gaming industry insiders are predicting the Kinect will be the must-have toy for gamers this year.


Last year's big toy for younger gift-getters was a robotic hamster, you may recall. Nothing has yet emerged to replace it this year, but the Los Angeles Times reports that parents and kids are buzzing about squishy pencil toppers, a Barbie doll that comes equipped with a functioning video camera, and toy musical instruments that can be played by touching the paper surface.


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