Business Week's Pallavi Gogoi offers a fascinating analysis of how Wal-Mart's decision to offer a sub-$1000 42" plasma TV last Christmas ruined the holiday for the entire retail electronics industry.
Hidden deep within the article is this seemingly innocuous sentence: "By most accounts, Wal-Mart had little to lose by dropping the price on the Panasonic TVs because it sold out its inventory nearly instantly." Translation: By limiting its per store on-hand inventory, Wal-Mart took a small hit while causing the entire industry to melt down. Granted, the retail chains made the classic marketing mistake of believing that flatscreens would remain high-profit saviors even as they flooded the market and cut margins. Combine those factors with the Wal-Mart effect and you have a perfect storm of a blue Christmas (or at least one that left chains in the red).
