Holiday price war intensifies

Wal-Mart, Target and other brick-and-mortar chains are counting on heavier discounts and a bigger online selection to keep up with Amazon.com this holiday season.

As Black Friday ushered in the year-end shopping rush, chains are touting larger price cuts than in 2015 - a gamble that maintaining market share is worth squeezing margins.

Based on a Market Track study of holiday circulars, Wal-Mart, for example, is offering an average discount of 39 percent, compared with 35 percent last year. At Target, the price cuts grew to 38 percent from 36 percent.

'With the lines between traditional brick and mortar and e-commerce continuing to blur, the need to make a big splash during large retail events like Black Friday is significant,” Traci Gregorski, senior vice president of marketing at Market Track, said in an emailed statement. 'The ease of comparison shopping across channels is creating a situation that puts a definitive advantage in the consumers' hands.”

Wal-Mart and others also are steering customers toward online deals, rather than just physical stores. While the chain still offers Black Friday specials at its supercenters, the day marks the beginning of a streak of online promotions called Cyber Week.

The National Retail Federation estimates that about 137.4 million consumers will make purchases in stores or online over the four-day weekend that started Thanksgiving. But the amount that Americans have spent has declined in the past three years, slipping 26 percent from 2013 to an average of $299.60 per person in 2015.

That's a sign that holiday purchases are spreading out over a longer time frame. Spending during the overall season - November and December - still is expected to grow 3.6 percent to $655.8 billion, the NRF estimates.

With Americans shifting their purchases online, the urgency of offering deals on Black Friday itself has diminished. eBay made a plea for consumers to start shopping on their phones the day before Thanksgiving, christening the event Mobile Wednesday.

One thing giving retailers optimism this year: There may be pent-up demand after a polarizing presidential election. Many chains, including Kohl's Corp., Gap Inc. and Barnes & Noble Inc., blamed the campaign season for hurting spending. With the outcome settled, they're expecting the dollars to finally flow.