As the holiday shopping season begins, many retailers are grappling with new ways to overcome what some see as a growing grinch.

With more than 4,300 stores worldwide, 100 million customers per week and annual sales in excess of a quarter of a trillion dollars, Wal-Mart has become a year-round threat to its fellow retailers. Come holiday time, a make-or-break season for many merchants, the pressure only intensifies.

It is not just the promise of low prices that attracts throngs of gift buyers to Wal-Mart. The opportunity for one-stop shopping has become a major draw for time-crunched consumers, and Wal-Mart ’s expansion into the grocery business has only enhanced the retail giant’s reputation for convenience.

“Especially during the holidays, when the important thing is spending time with family and friends, customers can come to Wal-Mart and take their errand list and get a lot of things checked off at once,” Wal-Mart spokeswoman Karen Burk said. “They can get their tires rotated for their holiday traveling, they can get their grocery shopping done, they can get something new to wear for a party, and they can get their shopping done for gift giving.”

With that proposition, is there room for other chains to compete?

Just ask Neiman Marcus, J.C. Penney, or GameStop, which have thrived in the shadow of Wal-Mart. They have grown their businesses by either sticking to areas of the market where Wal-Mart is absent, staying current with new brands and sleek advertising, or providing a more extensive selection and expert customer service in a particular merchandise category.

“We don’t try to compete with Wal-Mart, because nobody earns a living competing with Wal-Mart,” said Dick Fontaine, chairman and chief executive of the GameStop video-game chain, based in Grapevine, Texas. “What you have to do is to find a way to coexist within the sphere of Wal-Mart.”

Even Target, in many ways a direct competitor to Wal-Mart, has made a point of carving out its own niche, with designer-inspired clothes and housewares geared toward fashion-conscious shoppers on a budget.

But the retail industry’s Ghost of Christmas Past can point to plenty of chains that failed to protect their businesses from Wal-Mart.

Kmart hastened its downward spiral into Chapter 11 with an ill-fated price war against Wal-Mart in the 2001 holiday season. Last Christmas it was sandwiched by two high-profile bankruptcies in the toy business, with FAO Schwarz heading to bankruptcy court in early December and KB Toys following suit in January.

Other chains are taking different kinds of drastic action to stay relevant.

The slumping Sears, Roebuck and Co. just announced a megamerger with the reorganized Kmart chain. The move was designed to make both companies more formidable, but even combined they would have just one-fifth of Wal-Mart’s sales.

Size is one of Wal-Mart ’s biggest advantages because it makes the chain indispensable to major suppliers. By buying in mass quantities and wrangling favorable terms from vendors, the Bentonville, Ark.-based company can hold down costs and pass the savings along to consumers through low prices.

“They were the ones that took 25-inch TV sets and started advertising them at $299,” said retail consultant Britt Beemer, chairman of America’s Research Group. “They can ultimately dictate what the retail price is because they can tell the manufacturer what they’re willing to pay for it.”

Wal-Mart ’s impact has been especially felt in the toy business, which is highly dependent on “hot” items at holiday time.

Though it never had the breadth of selection of specialty toy shops, Wal-Mart carried enough of the most popular items at discount prices to overtake Toys R Us in the late 1990s as the nation’s largest toy seller.

Toys R Us, Target and other rivals learned to respond, closing the price gap from chain to chain, said independent toy industry analyst Chris Byrne. But keeping up with Wal-Mart’s prices spelled big trouble for KB Toys, which operates relatively small stores, mainly in shopping malls.

“Every square foot has to pay when you’re doing that – you can’t take a loss on things,” Byrne explained. But if Wal-Mart sells a key toy below cost to attract customers, “they hardly feel that because you’re still paying full price on car batteries and nail polish while you’re at the store,” he said.

Toys R Us has tried to compete on fronts other than price, sprucing up its stores and working with toy manufacturers to develop exclusive products. But it has not been enough to counter Wal-Mart ’s other big strength, which is making the toy aisle just another stop during a weekly grocery trip. This year, Toys R Us said it would consider selling its namesake toy chain to concentrate on its more profitable Babies R Us stores.

Specialty chains in other merchandise categories are changing the way they do business as well. Pier 1 Imports, for example, is working harder to find customers who are willing to pay a bit more for higher-quality furnishings.

“We had been appealing to a broad customer base, but the lower end we probably need to let go of a little bit,” Pier 1 Chief Executive Marvin Girouard said.

RadioShack, meanwhile, has put more emphasis on high-profit items that use new technology and might require one-on-one assistance from a salesperson.

It is a strategy that Wal-Mart cannot easily duplicate, RadioShack Chief Executive Len Roberts said, because Wal-Mart does not have the same focus on individualized customer service and because its customers tend not to be the early adopters of new technologies. But as products become more common and their prices drop, Wal-Mart is bound to step in and quickly dominate the playing field.

“We have to learn to be smart enough to get out of those businesses before they get to that commodity stage,” Roberts said. “That’s Wal-Mart’s business, and Wal-Mart is great at that business.”

RadioShack learned that lesson the hard way two years ago, when it tried to match Wal-Mart in offering rock-bottom prices on basic DVD players. The move hurt profit margins, and it was not repeated last Christmas. Instead, RadioShack focused on areas to which it believed that it brought unique expertise.

Product expertise has also been the strategy at GameStop, which advertises that it has “the world’s largest selection of gaming products.” The chain also has a game trade-in service, a magazine devoted to the gaming pastime and employees who can assist avid gamers or intimidated gift buyers. All these are ways to differentiate the chain from Wal-Mart, GameStop’s chief executive said.

Despite their best efforts, plenty of retailers have been unable to overcome Wal-Mart ’s might. The industry’s recent history is littered with regional chains and independently owned stores that could not compete on price, selection or convenience.

But early this year, Wal-Mart Chief Executive H. Lee Scott assured his rivals that there is plenty of room for them to grow. After all, he said in his keynote address to the National Retail Federation convention in New York, while Wal-Mart accounts for 8 percent of all domestic retail sales, that leaves 92 percent of the pie for everyone else.

“We don’t think we’re going to own the world,” Scott said. “If you doubt it, go to the Best Buy on the day after Thanksgiving.”