NEW YORK -- Forget style, quality and customer service. This holiday season, all that matters is price.
A week before Halloween and two full months before Christmas, stores are desperately trying to outdo each other in hopes of drawing in customers worn down by the economy.
Wal-Mart, the biggest store in the nation, joined the price wars Monday by announcing that it would give gift cards to shoppers if they buy something there and find it somewhere else cheaper.
Staples and Bed Bath & Beyond have already said they will match the lowest prices of Amazon.com and other big Internet retailers. Sears is going a step further, offering to beat a competitor’s best price by 10 percent.
“The days of marketing the stuff in your store because it was a hot brand are over,” says Dave Ratner, owner of Dave’s Soda & Pet City, a Massachusetts pet food and supplies chain.
For the holidays, Ratner plans to offer 20 percent off pet accessories if customers buy a bag of dog food. Customers, he says, just want a deal.
Almost four years after the onset of the Great Recession, they’ve learned to expect one, too. In better times, retailers could afford to keep prices higher and use promises of higher quality and better service to lure people into stores.
Those days are over. In a recent poll of 1,000 shoppers by America’s Research Group, 78 percent said they were more driven by sales than they were a year ago. During the financial meltdown in 2008, that figure was only 68 percent.
Wal-Mart last year went back to its “everyday low prices” roots, a bedrock philosophy of founder Sam Walton, rather than slashing prices only on certain items to draw in customers. Now everyday low prices might not be low enough.
So it’s trying something it is calling the Christmas Price Guarantee. If you buy something at Wal-Mart from Nov. 1 to Dec. 25 and find the identical product elsewhere for less, you get a gift card in the amount of the difference. The deal excludes online prices and some categories of merchandise -- groceries, prescription drugs and wireless devices that require a service agreement.
But it is good even if weeks pass between your purchase and spotting the better deal. And it applies even to big items like TVs, for which prices can drop steeply as Christmas approaches.
Duncan MacNaughton, chief merchandising officer for Wal-Mart’s U.S. stores, told reporters Monday he has noticed “much more promotional intensity and gimmicks” among competitors.”
Toys R Us’ big book of holiday offers will be packed this year with $8,000 of savings, compared with $5,600 last year, said Bob Friedland, a company spokesman. And it has added an incentive this year: If customers who sign up for its loyalty program spend $200 or more during the holiday season, they will get coupons on toys every month next year.
Retailers are responding to a customer base that is better informed, and more comfortable shopping online, than ever.
Wal-Mart left online prices out of its Christmas offer, but other stores have decided they may not have that luxury. Staples, for example, is leaving it to the discretion of store managers to decide whether to match online prices.
The holiday price wars mark an acceleration of a trend that has already swept the retail industry. Lowe’s, the nation’s No. 2 home improvement store, said in August it was starting to focus on everyday low prices for items that customers can easily comparison-shop at rivals.
In a survey of roughly 1,000 customers by Citi Investment Research & Analysis, shoppers also indicated it would take deeper discounts to get them to buy. Two-thirds said it would take 30 to 50 percent off to entice them to buy, compared with a little more than half last year.