Wal-Mart decided not to carry Amazon’s products beyond its existing inventory and purchase commitments, Sarah Spencer, a spokeswoman for the Bentonville, Arkansas-based company, said today in an e-mailed statement. Amazon, the top Web retailer, dropped 0.3 percent to $260.81 at the close in New York.
As Amazon seeks to challenge Apple Inc. with an expanding line of Kindle e-readers and tablet computers that offer easy access to its online store, it is meeting resistance from the brick-and-mortar retailers that compete with the e-commerce giant. Wal-Mart’s move follows Target Corp. (TGT:US), which said in May it would stop selling Kindles.
“When Wal-Mart sells a Kindle, they’re effectively putting in their customers’ laps a cash register for competitors,” Scott Tilghman, an analyst at Caris & Co. in Boston, said in an interview.
Amazon boosted second-quarter sales by 29 percent from a year earlier to $12.8 billion. By comparison, Wal-Mart’s second- quarter revenue increased 4.5 percent, to $114.3 billion.
Amazon earlier this month unveiled a new line of bigger, faster and sleeker Kindle e-readers and tablets as Chief Executive Officer Jeff Bezos seeks to draw consumers that are facing a widening array of choices for the devices. At stake is a piece of a market that may reach $66.4 billion this year, according to research firm DisplaySearch.
Removal from Wal-Mart’s store shelves isn’t much of a setback for Amazon, because it’s cheaper to sell Kindles online, said Sarah Rotman Epps, an analyst at Forrester Research Inc. (FORR:US)
“For Amazon, it’s much more profitable to sell through their direct channel, which is the majority of that business anyway,” Rotman Epps said in an interview.
Drew Herdener, a spokesman for Amazon, declined to comment. The Seattle-based company’s shares have gained 51 percent this year.
Reuters reported Wal-Mart’s decision earlier today.
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