Both Toys R Us and Target have cut toy prices dramatically, fighting back against Wal-Mart's early and aggressive discounting of toys this holiday season (see 'Wal-Mart Applying Toy Category Kill Shot').  Toys R Us has announced that it is matching Wal-Mart's prices, and Target may now have the lowest prices of all.  A Goldman Sachs survey of toy prices on Monday, November 24th found that Target's prices were lower than Wal-Mart's by an average of 3.5% on 100 top toy products.  That survey found Toys R Us prices about 3.5% higher than Wal-Mart's.    This is a narrower range than only a few weeks ago, and the average price has dropped. 

 

With the #2 and #3 toy market share retailers refusing to relinquish price supremacy to the #1 chain, the collateral damage is already heavy (see 'FAO Inc. Will File Chapter 11').