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Wal-Mart, Amazon, Target compete in DVD price war

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The Associated Press

The Tampa Tribune

Published: November 7, 2009

NEW YORK - First it was books. Now it's DVDs.

Wal-Mart Stores Inc. started another price war Thursday, trimming the online preorder prices of some upcoming DVDs following its price cut on books last month. And, once again, competitors Amazon.com and Target scrambled to match the prices.

It's the latest salvo in an ongoing online push by Wal-Mart designed to make sure everyone knows it intends to be the low-price leader on the Web, as well as in stores.

The Bentonville, Ark.-based retailer said late Thursday that it would lower the online prices of new DVDs such as "Harry Potter and the Half Blood Prince" and "Star Trek XI" to $10.

When Amazon reduced some of its DVD prices to $9.99, Wal-Mart shot back by cutting its DVDs to $9.98 as of Friday morning. Target got into the act Friday morning, too. All three companies also sweetened the pot by offering free shipping for the DVDs being sold.

The goal of such tactics is to drive higher volume, said BMO Capital Markets analyst Wayne Hood. He noted that some businesses such as Wal-Mart and Target can afford to lower their prices and still be profitable because of their low-cost distribution models.

Wal-Mart, which generated more than $400 billion in sales last year, has been aggressively trying to stake its claim online. The DVD discounts and last month's book discounts are part of a series of maneuvers the retailer has taken to draw shoppers to its Internet home.

Wal-Mart's book price war with Target and Amazon.com in October saw the companies lower the online preorder prices on titles such as "Under the Dome" by Stephen King and "Ford County" by John Grisham. Prices dropped as low as $8.98.

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