Will Black Friday be Flat Friday?

Wal-Mart jumped out early, but other stores are now playing catch-up

Think you have to wait until “Black Friday,” the day after Thanksgiving that traditionally kicks off the holiday shopping frenzy, to get a good deal on consumer electronics?

Not this year. Earlier this month, Wal-Mart jumped the gun on the holiday sales season when it announced it was immediately cutting back prices on almost 100 popular electronic items, including flat-panel TVs, digital cameras, and notebook computers. Typically, retailers wait for the Thanksgiving holiday to jump-start sales for the Christmas season. But with these price cuts, Wal-Mart, which last year tried to move a bit more upscale by selling better, higher-priced goods, sent a strong message to its customers that it was returning in force to its low-price roots.

While the chain cut prices on a broad assortment of electronics, it was particularly aggressive in a category expected to be very hot this Christmas: flat-panel HDTVs. For example, it lopped $500 off a 42-inch Panasonic plasma HDTV (TH-42PX6U), bringing its price to $1,294 from $1,794, and sliced $300 off a Polaroid-brand 37-inch LCD TV, now priced at $997. The Panasonic plasma is still priced at more than $1,700 at most other retailers – but that could change in the next 10 days.

There are several reasons for the focus on flat-panel TVs. One is simply that they’re becoming must-have holiday items. According to a recent Consumer Reports holiday poll, one-fifth of the respondents say they intend to buy a flat-panel TV for, or after, the holidays. For another, sales of other potentially hot products are being hampered by high price, customer confusion, or lack of availability. For example, sales of Blu-ray and HD DVD high-definition DVD players have been slowed by high prices, a limited number of models, and a format war that’s left many potential purchasers on the sidelines. Much-awaited new game systems, such as Sony’s PlayStation 3 and Nintendo’s Wii, will be relatively expensive ($500 to $600 for PS3, $250 for Wii) and in short supply until the spring. And Microsoft’s delay shipping its new operating system, Vista, until the end of January is causing many would-be computer buyers to hold off until early next year, when they can buy their new PC with Vista pre-loaded on the hard drive.

In addition, there’s simply more competition in the flat-panel market. There are now more brands fighting for shelf space, and unlike last year, when there were spot shortages of certain sizes and models, flat-panel TVs will be widely available this fall and winter (so far, fears about possible LCD shortages, due to cuts in production, have proven unfounded). In addition, more stores are deciding to sell TVs, or are expanding their offerings. Home Depot, for example, which previously sold TVs only via the web and catalogs, is now carrying them in stores, and many computer superstores, such as CompUSA, have expanded their selections. 

So while Wal-Mart may have jumped the gun on holiday sales, there’s still a good reason to hold off buying until Black Friday: other retailers will be using the event to play catch-up. Some of the bigger chains have been asking TV manufacturers to suspend their minimum advertised price (MAP) requirements, which set the lowest prices stores can advertise their products without the manufacturer cutting off co-op advertising funds, for the three-day period. Typically, manufacturers don’t waive MAP requirements until a model’s been discontinued. Panasonic has reportedly agreed to waive MAP for a three-day period – which is why you may see ads with particularly aggressive prices for their sets – but it’s unclear whether other companies will follow suit. Based on our calls to manufacturers, several big-name brands will be dropping flat-panel prices in the coming weeks, but they’re being described as “normal” price cuts, not reactions to Black Friday specials. 

Still, based on several Web sites that have posted “leaked” Black Friday circulars for the major retailers, pricing during the Black Friday weekend should be quite aggressive. For example, a number of stores will be matching, or coming close, to Wal-Mart’s Panasonic price. If the leaked ads are correct, however, Wal-Mart will be responding with what could be the industry’s first sub-$1,000 42-inch HD plasma: a Viore-brand 720p model (PDP42V18HA), priced at $988. Wal-Mart also says it will be posting special deals on its website that aren’t mentioned in its Black Friday circulars. 

Based on the Black Friday websites we visited, here are some other flat-panel deals to expect from some of the major retailers:

• Best Buy will offer a Toshiba 50-inch plasma HDTV (50HP66) for $1,699 – down from $2,999 – and a 42-inch Westinghouse LCD TV (W4207) for $999 -- but only until noon as part of a “7-Hour Special.” Best Buy says there will be at least five per store, so that means quantities are limited. The chain sweetens the deal with 24-month no-interest financing.
• CompUSA is tying several Thanksgiving deals to a purchase and in-store activation of a Motorola RAZR V3 cell phone. Examples include a 23-inch Olevia LCD, which will be priced at $99. Separately, there will be a $400 “instant savings” on a 50-inch Zenith plasma set (Z50PX2D), bringing its price down to $1,799, while Panasonic’s 50-inch plasma (TH-50PX60U) is sale-priced at $2,499 after a $500 instant savings. The company also has a 36-month no-interest offer on any “total” home theater purchase of $799 or more.
• Circuit City will have a 50-inch Vizio plasma TV (P50HDTV10A ) for $1,499, down from $1,999, and Panasonic’s TH-42PX60U will be sale-priced at $1,299 (take that, Wal-Mart). A 50-inch version (TH-50PX60U) will be $1,999. The store is offering wall mounting of either set for $199, including the mount. Prices are good on Friday and Saturday only, and an 18-month no-interest offer is available on TV purchases of $499 and higher.
• Sears will have a Toshiba 42-inch plasma HDTV (42HP66) for $1,199 from 5 a.m. to 11 a.m. only on Friday, and a Magnavox 42-inch HD LCD TV (42MF531D) for $1,359 on Friday and Saturday. A 50-inch Magnavox HD plasma (50MF231D) will be $1,999.
• Meijer will offer a 42-inch Sylvania plasma EDTV (enhanced definition, not HDTV) for $499 (after $200 mail-in/online rebate) Thursday only, with 3,000 sets available chain-wide. Friday’s and Saturday’s “doorbuster” deal is a 37-inch Sylvania LCD HDTV for $699 after a $200 rebate.

Certainly, prices on flat-panel TVs will be as attractive as they ever have been this holiday season. But for many of us, the key question is, “Will they be cheaper if we wait another month or two?” The answer, of course, is pure speculation, although experience tells us that sets are likely to drop again in price. However, we expect that any cuts will not be as dramatic as what we’ve already seen this year, and if any shortages develop in the final months of the year, prices could stabilize, or some models may no longer be available. You’ll have to determine whether missing out on a few months of “Desperate Housewives” or the bulk of the NFL season in high-definition is worth any money you might save. --  Jim Willcox