Target winning toy fight so far

The toy category is intensely competitive every holiday season and even more so this year thanks to early and aggressive price-cutting. Normally, Walmart is the company making most of the noise about its unbeatable toy prices, but this year Target appears to have outflanked its larger rival with creative promotions and compelling prices that have it positioned to win, according to Citigroup retail analyst Deb Weinswig who has Target as one of her top picks this holiday season.

In a research note out this week she said, “We think Target is winning the fight this holiday, and we conducted our second toy pricing survey of the season to analyze the retailers’ promotional intensity. While Walmart has tried to throw a few haymakers by lowering prices since our last survey, Target has kept pace. In addition, Target’s 5% Rewards program is still the punch Walmart can’t defend this holiday season.”

Weinswig looked at a basket of popular toys on Oct. 21, and again more recently, and found that Target had actually widened the pricing gap with Walmart whose toy prices were 430 basis points higher compared to the earlier version of the study when prices were 310 basis points higher. The folks at Walmart surely take exception to the study methodology since it includes the 5% discount, which is only available to Target shoppers who use one of the retailer’s REDcards. For those paying by any other means, Walmart is less expensive by 100 basis points compared with 210 basis points in the earlier study.