Wal-Mart Hopes to Amp Up Spending With Layaway

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Wal-Mart (NYS: WMT) is giving its hard-hit consumer base a holiday present: letting them pay as they go.

The retail giant is bringing back its layaway program in time for the holidays from Oct. 17 to Dec. 16, which allows consumers to pay for merchandise over time, without interest, and pick it up once it's paid for.

The move follows other retailers such as Toys R Us, Kmart, and Sears (NAS: SHLD) that have hyped up, brought back, or expanded their layaway programs in response to budget-conscious consumers' needs during the downtown.

"We're always looking for ways to ease budget strain for our customers, and we know this holiday season brings with it additional financial pressure," Duncan MacNaughton, chief merchandising officer at Wal-Mart's U.S. division, said in a statement.

The program's comeback will likely appeal to Wal-Mart's low-income shopping base, which is grappling with unemployment and other economic pressures. Wal-Mart is also in need of the sales boost, having seen revenue drop for nine consecutive quarters at its U.S. stores open at least a year.

The layaway concept, which became wildly popular during the Great Depression, was revived when the economy crashed in late 2007 and credit became scarce. Wal-Mart scratched its layaway program about a year earlier in September 2006, citing heightened credit card usage.

Wal-Mart's new layaway program has a few stipulations: Customers can only layaway toys and electronics that cost at least $15 each, the total purchase must be at least $50 and a 10 percent down payment is required. If there's a big consumer response, the company may extend the program, it said.

Wal-Mart also said it's slashing prices on dozens of holiday toys to $15, starting Monday.

If none of this gives you the itch to buy, it may still be worthwhile to keep an eye on Wal-Mart or Sears. You can add any of these stocks to your Foolish watchlist by clicking the "+" icons above. Don't have a watchlist yet? Set one up today for free.

At the time this article was published Fool contributor Tierney Plumb holds no positions in any of the stocks mentioned. The Motley Fool owns shares of Wal-Mart.Motley Fool newsletter serviceshave recommended buying shares of Wal-Mart.Motley Fool newsletter serviceshave recommended creating a diagonal call position in Wal-Mart. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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