Imitate the Action of the Tiger*

Sorry, Fox News. It appears there will be no societal "War on Christmas" this year.

Wal-Mart employees will wish shoppers a "Merry Christmas," and Target — three years after booting Salvation Army bell ringers from its curbsides —this month dropped a cool million into the kettle and announced a partnership with the organization to raise additional money during the holiday season.

So, all the traditional niceties will be observed and all is right with the world. Except, maybe, the prospects for robust fourth-quarter profits?

The early launch of the selling season (Would you like an inflatable reindeer with that jack-o-lantern, ma'am?) was followed almost immediately by deep price cuts from the Lords of Bentonville and pledges of The Most Aggressive Rollbacks Ever.

Whether the anticipated traffic volume will whip some air into Wal-Mart's deflated comps remains an open question. Rival Target immediately reaffirmed its policy to match Wal-Mart prices. But elsewhere, there were few signs of other competitors accelerating their promotional schedules.

Some can't. Category killers Toys 'R' Us and Circuit City both enter the critical selling season in weak shape. A race to the pricing bottom with Wal-Mart could prove suicidal.

And some don't have to. Best Buy's customer may shop Wal-Mart's supercenters for groceries, but her household already owns a flat-panel, big-screen TV. JCPenney and Kohl's shoppers may bite on Wal-Mart's electronics and toy discounts, but so far they've shown little inclination to drift over to the apparel and home décor aisles.

Part of Wal-Mart's strategy has always been to make a noise about its pulverizing price cuts. Myriad retailers have gone down to defeat attempting to march to that tune.

Do major merchandisers as a group habitually cut prices too soon and by too much? Perhaps. But many of those still standing have found other strategies to remain profitable, and, one hopes, will continue to do so in the contentious fourth quarter.

Maybe retailers leave more margin on the table than they have to, during the holidays. However, what we've seen during the past few Christmas seasons has turned out to be less about the triumph of one channel over another — and more about individual company strategies that either deliver or fail to.

Wal-Mart's precipitous lurch into the breach may have the effect of damping down profitability for the sector, but it doesn't portend an overarching catastrophe for the industry.

In any event, now the game's afoot. The shoppers have bolted from their slips. Come January, we'll sort our dead from the living.

* William Shakespeare, King Henry V, Act 3, Scene I