Toys R Us discounts prices in US
Partnership with Ahold to be extended in push for market share
June 9 2002
Toys R Us Inc hopes to challenge Wal-Mart with a new assault on the US toy market.
In the run-up to Christmas, the toy retailer will reduce prices on around 200 lines and expand its shop-in-shop format in the Giant supermarket chain, owned by Ahold.
The company also plans to trial four smaller format stores. Called Geoffrey, after the Toys R Us giraffe mascot, the smaller stores will feature selected products from all three existing US retail formats; Toys R Us, Kids R Us and Babies R Us.
The successful store-in-store format, trialed in four Giant outlets in Washington DC, will be expanded to more Ahold-owned supermarkets across a wider area.
The aim is to recover some of the ground Toys R Us has lost to Wal-Mart, which overtook it as the number one US toy retailer several years ago. Chairman and chief executive John Eyler told Chain Store Age magazine that some of the price cuts will on branded toys will be compensated for by higher margins on own label products. These include the Animal Alley range of soft toys, which accounts for 20 per cent of total sales.
Toys R Us has reduced its total range from around 14,00 to 8,500 lines, and improved on-shelf availability from 64 per cent a few years ago to 95 per cent today. Earlier this year, it announced the closure of 64 stores and streamlined its distribution by combining a number of depots.
Eyler said the company hoped to expand its market share form the current 17 to per cent to around 20 per cent.
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