Wal-Mart Hopes to Amp Up Spending With Layaway
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.
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