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Heavyweight Retail Fight


Gonna drink 'til I get my Fil... (and probably for a while longer after that.)

Welcome Mr. Zucchi, a pal of mine from way back! Minyans you're in for a treat. Fil, you need not defer to me regarding margin pressures for Best Buy (BBY:NYSE) or anything else, my man. But if you're looking for no-cost, half-gluteal opinion on the retail season please do read on.

While watching the entertaining-in-a-sadistic-way heavyweight championship beat-down last weekend it occurred to me that Wal-Mart (WMT:NYSE) in its current form is much like Vitali Klitscho. Both WMT and Klitscho are devoid of grace, don't execute the fundamentals the way they should (or, in WMT's case, once did) and seem entirely vulnerable. Which doesn't change the fact that by sheer force of will, strength and size they are going to crush anything in their way.

Wal-Mart's post-black-Friday vow to cut prices ended any realistic plans retailers had to hold price cuts until post-Christmas. It was a straight-right hand into Best Buy's grill, telling the C/E kingpin that, whatever BBY had planned to do this season, the reality was that they were going to compete on price at the low-end.

Inventory levels are generally low but only by the bloated norm of early December. Retailers regard any inventory going into January as dangerous and will price how they have to in order to avoid the fate of a bloated January. Retailers need to sell-through their goods pre-December 25th and they've only got one more weekend to do it.

Which means that prices are probably already lower than what Minyans saw last weekend. Should this week start slowly it'll be a red-tag frenzy by Friday. Good for consumers, not so great for the average merchant.
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