Wal-Mart’s Web War With Amazon

The world’s largest retailer has sparked a price war with Amazon in books and DVDs, two of the Internet company’s strong suits. While only a few items are being discounted deeply so far, both companies appear to be selling some products at a loss. With online purchases of everything from clothing to green lawn mowers growing in popularity, one interpretation is that Wal-Mart is trying to defend the rest of its turf. Electronics, for instance, are important for Wal-Mart’s brick-and-mortar business while also being a big growth area for Amazon. But there is little sign of pressure on Wal-Mart to move more discount Dell notebooks. In fact, it increased its share of the flat-panel television market to 14.6% from 12.1% over the past twelve months, according to research firm Traqline, while Amazon’s fell to 2.7% from 3.1%. In general, Wal-Mart sales of household durables dwarfs those of Amazon, and with Christmas coming, expect that trend to continue as they outsell on storage units and Christmas tree bags.

Nov 13, 2009