Wal-Mart (WMT) got the jump on retailers like Target (TGT) during the holiday season by starting deep discounts in October. Now it has beaten them again for a piece of the upcoming stimulus plan.
Wal-Mart announced Tuesday that it will cut prices between 10 to 30% this week on groceries, electronics and other home-related products in an effort to “help with added savings throughout the year, focusing especially on what people want, when they need it,”.
The initial cuts come during the build up to the Super Bowl and will focus on game related items. How big is the Super Bowl pie? Try $9.5 billion. This will be a blow to retailers like Costco (COST) and BJ’s (BJ).
“We will have more of these during the busier shopping periods of the year like Valentine’s Day and Easter,” Wal-Mart spokeswoman Melissa O’Brien said.
Here is the genius of the plan. Wal-Mart said “it will offer no interest for 18 months on purchases of $250 or more with a Wal-Mart Credit Card. Now, folks can add and those who are looking at $300 per person can go to Wal-Mart and get a jump spending that money. Wal-Mart will be smart and keep most folks limits below $500 so that the bills can easily be paid when the checks come in.
Not only will Wal-Mart enable folks spend those checks and get a great value for them, they will front them the cash to do so.
Brilliant…
Disclosure (“none” means no position): Long Wal-Mart, None
