Chop, Chop: Wal-Mart Cuts More Prices on Consumer Electronics
Wal-Mart Stores (NYSE:WMT) has a new strategy to take on Amazon (NASDAQ:AMZN): Enter (more) discounts. 24/7 Wall St. reported Sunday that the big box retailer has started offering a number of large discounts on consumer electronics, and the company’s executives are hoping that the price cuts will help drive stronger sales, ultimately resulting in more encouraging earnings.
Wal-Mart has been suffering disappointing quarters for a while now, and investors are beginning to show an uneasiness for the flattened demand that continues to confront the retailer. Now that Wal-Mart’s shares are down 1.8 percent this year, the Bentonville, Arkansas-based company has no choice but to continue to drop its prices. However, with online competitor Amazon always much too eager to match those discounts, Wal-Mart’s new prices could all be for naught.
But despite the risk, Wal-Mart is still going for it. According to 24/7 Wall St., Wal-Mart’s latest promotions drop the prices on TVs, laptop, tablets, and cellphones. Most of the deals are for brands from companies that have been performing poorly in terms of sales — think Hewlett-Packard (NYSE:HPQ) — and some consumer electronics prices are dropping dramatically. 24/7 Wall St. highlighted the example of VIZIO SmartLEP 55-inch televisions going for $698 and home theaters seeing prices as low as $278.
Some of the new discounts are absurd, but they’re also tailored to appeal directly to traditional Wal-Mart shoppers — people who have low incomes and are especially cost conscious. Though in the past they might not have even considered investing in certain electronics, Wal-Mart’s new prices may be able to entice them, and that’s where the big box retailer could make big sales.