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Amazon beats Wal-Mart on toy prices as holiday season begins

story by Matt Townsend
Bloomberg News

Amazon.com Inc. has cheaper online prices for toys than Wal-Mart Stores Inc., Target Corp. and other major chains as parents begin shopping for the holidays, according to a Bloomberg Industries analysis.

In a comparison of 125 randomly selected toys conducted on Nov. 8, Amazon had lower prices than Wal-Mart on 44% of the items, while Wal-Mart had the advantage on 13%.

The remaining had the same price tag. Wal-Mart beat Target Corp., Sears Holdings Corp.’s Kmart chain and Toys “R” Us Inc. on more than 80% of the toys, according to a report led by Poonam Goyal, a Bloomberg Industries analyst.

“Toys are important because they are the top category for the holiday, along with electronics, and are the most competitive,” Goyal said.

Amazon’s lead came as a surprise because Wal-Mart led in last year’s pricing study for much of the holiday season, Goyal said.

Amazon had the advantage on such items as the limited- edition version of “Resident Evil: Operation Raccoon City,” a video game for the PlayStation 3 that it priced at $20.98, compared with $39.96 at Wal-Mart.

Another key is how well stocked retailers will be during the holiday shopping season, Goyal said. The largest toy sellers have better inventory levels than they did a year ago, according to the study.

Amazon, Kmart and Toys “R” Us didn’t have any toys out of stock online, while Wal-Mart was missing 3% and Target didn’t have 8%. In the same week a year ago, all of these chains had higher levels.

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With the exception of Amazon, out-of-stock levels increased last year as the holiday season neared its end. By Dec. 21, Wal- Mart, Target, Kmart and Toys “R” Us were all out of stock on more than 40% of items in the study, while Amazon was missing only 1%.

“It appears they’ve learned their lessons from last year,” Goyal said. “If retailers are stocked well, holiday should go well for them.”

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