• Reuters, Monday, October 1, 2007 11 AM

Wal-Mart began cutting prices on toys in its stores yesterday, and will be introducing special price cuts on hot toys each week during October. "It's a little bit earlier and a little bit deeper," says Laura Phillips, Wal-Mart's chief toy officer, about the timing of this year's holiday toy promotions and the size of the price reductions.

For example, this weekend Wal-Mart cut the price on the Fisher-Price Kid Tough Digital Camera--one of last holiday season's hottest-selling items--to $54.88 from $64.88. At the moment, this season lacks one dominant hot toy, like last year's T.M.X. Elmo from Fisher-Price. But Wal-Mart expects there will be fresh excitement in November when Fisher-Price introduces a new Elmo doll.

The price cuts come as U.S. retailers gear up for the all-important holiday shopping season amid an uncertain economic environment. The National Retail Federation has already forecast that U.S. holiday sales will rise at their slowest pace in five years. The cuts also come after millions of toys bearing the "Made in China" label were recalled, mainly due to unsafe levels of lead paint.

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