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Wal-Mart’s Opening Salvo

November 7, 2006 | Author: Ibex Marketing

Inventories of flat panel HDTVs have declined since midsummer; actually, they have increased, but unit sales have increasd much more, so the net effect is that the supplies are tighter. The net effect, however, is that this has eased the pressure on manufacturers and retailers to keep cutting prices. And so my earlier predictions that September was a pretty good time to buy an HDTV was about right.

But now a new factor has come into play. Economists and pollsters are predicting that consumers will be tighter with the purse strings this holiday shopping season, due to a host of concerns including job uncertainty, the spectre of higher energy costs returning, and the weakened housing market. So retailers are faced with a dilemma: maintain current prices (and profit margins) and settle for less than breathtaking sales numbers, or slash prices even further in hopes of attracting more buyers.

Last week, Wal-Mart left no doubt which route it has chosen. Not waiting for Black Friday (the Friday after Thanksgiving), Wal-Mart launched a preemptive pricing strike on the competition. According to a company press release, new pricing includes the Panasonic 42″ HD plasma TV (was $1,794/now $1,294) and the Polaroid 37″ LCD HDTV (now $1,297/will be $997) and the RCA 32″ LCD HDTV (was $997/now $847).

Now a 37″ LCD HDTV for under $1,000 is news, but it’s not the first time we’ve seen such a price. However, this does help put Wal-Mart in the minds of shoppers who might not have considered it as a source for an HDTV. And it’s also certain that we’ll see other retailers dropping their prices to try and keep up. So it looks as though you can expect to find some good bargains over the next two months.

The national retailers are advertising many new low prices for various models, including 37″ LCDs under $1,000.