Wal-Mart kicked off its holiday merchandising by announcing that it was 'starting early and aggressively' with price competition on select toys.  Price rollbacks of 10% to 50% will occur weekly in October, according to Wal-Mart's announcement, with cuts on nine products this week.  Among those is one game, Are You Smarter than a 5th Grader, which Wal-Mart is selling for $12.88 ($24.99 MSRP). 

This is the earliest the category-killing discount chain has ever started the toy category price wars for the holiday season.  Last year, price cuts started in mid-October (see 'Wal-Mart's Toy Category Kill Shot Redux').  Back in 2003, the year that defined the strategy of aggressively using cheap toys to get shoppers into its stores for the holidays (see 'Wal-Mart Applying Toy Category Kill Shot'), with its collateral damage to other toy retailers, the pricing news came out in November. 

It's probably a good year to start discounting early; with a lot of stresses on consumer spending, it may not be a robust holiday season.  The National Retail Federation is forecasting that U.S. holiday sales will rise at 4% in 2007, the lowest pace in five years.