Will Wal-Mart Steal Christmas?

As the retail king slashes prices on toys, its rivals are dreaming up new ways to compete

They may not realize it, but the good folks of Fond du Lac, Wis., are participating in a high-stakes shopping experiment courtesy of Toys "R" Us. The $11 billion toy chain selected this lakeside resort town surrounded by dairy farms to test a radical departure from its traditional Toys "R" Us stores, which typically feature row upon row of shelves crammed with toys and little else. The new shop, Geoffrey, named for the company's mascot giraffe, is a multihued, airy warehouse that's part playpen, part kids' mall and part toy store. Accompanied by the sound of peppy music, children carouse on...

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