Wal-Mart Stores Inc is cutting prices on popular toys and ramping up the opening of Christmas shops in its U.S. stores as the retailer tries to win sales from cash-strapped shoppers ahead of what could be the worst holiday season in 17 years.
Wal-Mart said on Wednesday that it will sell ten toys, including certain Barbie dolls and Tonka trucks, for $10 each. It is also putting its Christmas shops on the "fast track" and intends to open the shops, which sell ornaments and holiday decor, in its stores nationwide by October 10.
Wal-Mart spokeswoman Linda Blakley said its shoppers, who are increasingly living paycheck to paycheck, are indicating that they will start their holiday shopping earlier this year to stretch their limited budgets.
"Given current conditions, some (shoppers) need to spread out their Christmas shopping over a longer time-frame than they may have last year," she said.
Last year, Wal-Mart cut prices on hot toys on September 30 to try to persuade hesitant shoppers to spend on holiday items.
But this year, retailers are bracing for what some economists predict could be the worst Christmas season since 1991, when the nation had only recently emerged from a recession.
Consumers, battered by the housing market downturn, surging food and fuel costs, a credit crunch, and a weakening job market, have shown an increasing reluctance to spend this year. The recent turmoil on Wall Street and in the stock market has only made the outlook for the season only more precarious.
This year, Wal-Mart has been heavily emphasizing its low prices, and its sales have been outpacing those of its competitors as shoppers head to its stores for discounts on food, toiletries and electronics.
To deal with the tough economy, Wal-Mart said shoppers are indicating they will purchase less expensive items, to start their Christmas shopping earlier or purchase presents for fewer people on their list.
Wal-Mart is not alone in trying to get shoppers into the holiday mood. Macy's Inc has set up its Holiday Lane Christmas shops in its stores, while discount retailer Target Corp is also selling holiday ornaments and decor.
(Editing by Gary Hill)
Maurice Greenberg, former chief executive of American International Group (AIG.N), has asked the company's current chief executive Edward Liddy for the chance to bid on AIG assets as the company seeks to repay an emergency loan from the federal government.
Liddy took the helm of AIG, once the world's largest insurer, two weeks ago, after the government agreed to lend AIG $85 billion dollars in exchange for a 79.9 percent stake in the company to stave off potential bankruptcy protection.
AIG has been preparing to sell off assets to begin paying off that loan as a group of shareholders seeks to keep control of the company. Among the assets AIG is considering selling is its aircraft leasing unit, reinsurer Transatlantic Holdings, and London City Airport, according to reports.
Greenberg made the request in a letter dated Sept 29, and said the process of the selling of assets has been taking place "without transparency and without providing the opportunity for the participation of alternative purchasers" that would help AIG get the best price for shareholders.
The authenticity of the letter, first reported by the Wall Street Journal's Website on Tuesday, was verified by Greenberg's spokesman Glen Rochkind.
In the letter, Greenberg told Liddy he has a fiduciary duty to obtain the best possible price and "you cannot do so by ignoring offers from qualified potential purchasers."
"AIG welcomes any reasonable expressions of interest in the businesses we plan to sell," said AIG spokesman Joe Norton, who confirmed Liddy's receipt of Greenberg's letter. Norton declined to comment further.
Greenberg left AIG in 2005 following an accounting scandal under the threat of prosecution from then New York State Attorney General Eliot Spitzer. He has denied any wrongdoing.
(Reporting by Phil Wahba, additional reporting by Lilla Zuill; editing by Bernard Orr and Carol Bishopric)
President George W. Bush on Tuesday signed into law a mammoth spending bill to keep the government running until early March 2009 that includes a $25 billion loan package for troubled automakers.
The action came after the Senate over the weekend gave final congressional approval to the more than $630 billion spending bill that was needed to finance defense, education, farm, health, foreign aid and other government programs after the current fiscal year expired on September 30.
The spending legislation allows a ban on offshore drilling to expire on September 30. Democrats had hoped to extend the ban, but did not have the votes to overcome strong opposition from Republicans.
Bush, in a statement announcing that he had signed the legislation, said the measures to lift the ban on offshore drilling "will allow us to reduce our dependence on foreign oil."
The bill sets aside $7.5 billion in taxpayer funds needed to guarantee $25 billion in low-interest loans to help General Motors Corp, Ford Motor Co and Chrysler LLC produce more fuel-efficient cars and trucks.
U.S. automakers have said the taxpayer-backed loan package
would give them access to capital at a time when credit markets are shut and they are being driven to invest in new technologies to meet tough new federal fuel economy standards.
The $25 billion loan package, the biggest federal subsidy for the auto industry since the 1980 bailout of Chrysler, cleared Congress last weekend when the focus was on the debate over the $700 billion financial rescue package.
GM, Ford and Chrylser had said they could manage without the federal loans but also suggested that without the federal subsidy thousands more industry jobs could be at risk.
Both presidential candidates, Democrat Barack Obama and Republican John McCain, backed the auto loan package, which had strong support in battleground election states like Michigan and Ohio.
U.S. auto sales have been slumping for three consecutive years, forcing Detroit automakers to slash jobs and cap new investment. Through August, U.S. sales were down 11 percent and on track to hit the lowest level in 15 years.
The loan package was authorized -- but not funded -- in a 2007 energy law that requires automakers to improve the fuel efficiency of their vehicles by 40 percent by 2020.
Major automakers have said that will require up to $100 billion in combined new investment to retool factories and invest in new technology, including next-generation battery-packs for electric vehicles.
Industry executives, including GM Chief Executive Rick Wagoner and Chrysler Chief Executive Bob Nardelli, said they would press for liberal federal guidelines once the law was sent to regulators in order to use the funds to offset the cost of a wide range of investment.
Japanese automakers Toyota Motor Corp and Honda Motor Co could be eligible for the low-cost federal funding but have said they have no intention of applying for the loans.
Congress passed the massive spending bill before the new fiscal year began October 1 because lawmakers failed to approve any of the 12 spending bills needed every year to fund government operations.
(Reporting by Tabassum Zakaria and Kevin Krolicki; editing by Carol Bishopric)