Toys"R"Us Takes on Walmart Prices in December Deal and Beats a Couple

Toys"R"Us is getting serious about Christmas, serious enough that some of the prices in its latest promotion beat Walmart's.

Toys"R"Us is starting its countdown to Christmas with what the company characterizes as the "Biggest December Sale Ever." In addition, it has launched a new catalog that fills 40 pages with hundreds of toy bargains, and it is initiating a deal of the day program that promises deep discounts on specified products and product categories. To make holiday visits more convenient, Toys"R"Us stores are stretching operating hours, opening from 7 a.m. to midnight from today through Dec. 16 with the exception of Saturday, Dec. 12, when they will be open an hour earlier.

But, of course, it's big sales that are the real holiday draws, and Toys"R"Us had some winners in its latest, an online check revealed. For example, it's Twilight Scene It DVD game was listed at $19.99 this evening, down from $29.99 as part of the December sales event. Walmart's price was $25.54. Plus, Toys"R"Us offered a free New Moon bracelet â€" a trinket relating to the currently running Twilight: New Moon movie -- with purchase.

Then there are Transformers toys. At Walmart (WMT), the Transformers Movie 2: Revenge of the Fallen - Combiner Class: Constructicon Devastator was listed at $84.88 this evening but was out of stock online and not sold in stores. At Toys"R"Us, the same item was $79.99 down from $99.99, in stock and in the free shipping program.

In fact almost all of the 17 Transformer action toy items at Walmart.com were sold out. The couple that was still available only offered free shipping under the Site to Store program, which sends products at no charge to the purchaser's nearest Walmart.

Could Toys"R"Us have deliberately targeted goods Walmart had sold out for its promotion? The move certainly would have been clever. After all, shoppers led to the retailer for the must-have Transformer item are more likely to consider an additional purchase than those who never visited at all.

Toys"R"Us also had some sweet deals on WWE Best of Ruthless Aggression 2009 action figures for the season of Peace on Earth, Good Will Toward Man with prices at $6.99 down from $9.99. A click on the WWE link in Walmart's action figure web page brought a visitor to a Wii page tonight.

As unlikely as it may be, if Toys"R"Us put its WWE bargain into the Best December Sale Ever knowing that Walmart's WWE link was fouled up, then that's something competitively special. And it's not as if a lot of people are going to trade up from a $6.99 action figure to a $199 Wii.

Still, any revelation of Walmart's online shortcomings in the struggle for toy sale supremacy must be balanced by fact that Toys"R"Us was out of stock on three of the five WWE Best of Ruthless Aggression figures offered.

Bargains or no, the holidays are complicated for shoppers and sellers alike. For Toys"R"Us, though, they're a matter of survival. Earlier this year, the company bought FAO Schwarz, the upscale toy retailer famous for its plush animals, and pulled the products from Macy's stores, where they were settling into a new boutique department. For Thanksgiving, Toys"R"Us made them a promotional focus, which provided it with something unique in the period around Black Friday.

Still, consumers typically shop hard for price over the holidays, especially now, and Walmart made a big splash with its 100 Toys for $10 deal. While it established similar price deals to match, Toys"R"Us has seemed to trail Walmart all season and is in the process of giving up market share to its rival according to one study. So, the company has little choice but to be aggressive now. Privately held, it won't be easy to see just how much its margins will compress as the holiday season winds down. Yet, it's better off gradually squeezing now and taking the profits it can. Big January clearance sales will signal that even its best efforts couldn't wring much cheer from the holidays.