Book Markdowns: Wal-Mart v. Amazon

By Ashley M. Heher, AP Retail Writer

CHICAGO (AP) — Taking a page from its original playbook, Wal-Mart Stores launched a full-fledged price war with Amazon.com and a nation of book retailers, lowering prices on certain highly anticipated hardback titles to $9.

The volley of discounts, which began Thursday when the retailer listed prices for some upcoming hardcover releases such as Dean Koontz' Breathless and Stephen King's Under the Dome at $10, was answered with a similar price cut by Amazon, the largest online bookseller. Then the two competitors lowered the prices even further to $9.

Observers say the book discounts, the latest in a series of aggressive online maneuvers by the world's largest retailer, could position the company to do to the online marketplace what Walmart stores did to local merchants decades ago.

"While it's the largest retailer in the United States, it's not the dominant online retailer in the United States," said Albert Greco, professor of marketing at New York's Fordham University. "And this appears to be an attempt to increase its position in the online space."

In the past seven weeks, Bentonville, Ark.-based Wal-Mart has racheted up the competition in several retail arenas, beginning with an Amazon.com-like announcement in late August that it would allow outside retailers to sell nearly 1 million items — from baby products to sports memorabilia — through its Walmart.com site.

Next came news that the low-price specialist would fill 90-day supplies of some 300 generic prescriptions by mail for as little as $10 and was launching its own cell phone plan.

And just this week, the company said it would begin selling health and beauty products online.

But it was the announcement about books — the base from which Seattle-based Amazon.com built itself into a powerhouse — that created the biggest stir.

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