Wal-Mart and Amazon.com trade price cuts on books

CHICAGO — Taking a page from its original playbook, Wal-Mart Stores Inc. launched a full-fledged price war with Amazon.com Inc. and a nation of book retailers, lowering online 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's "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.

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 City's Fordham University. "And this appears to be an attempt to increase its position in the online space."

The price war also is foreboding news to the large chain bookstores Borders Group Inc. and Barnes & Noble Inc., which have been squeezed by Amazon.com's discounting and a decline in their music business.

In the past seven weeks, Wal-Mart, based in Bentonville, Ark., 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.

The discounts, which also include Sarah Palin's "Going Rogue" and John Grisham's "Ford County," are a cut of 60 percent or more from cover prices, which means the two competitors are likely selling the titles at a loss.

Hardcover releases, which typically have a suggested retail price of at least $25, are generally sold to merchants with a wholesale price that's a 47 percent discount.