Walmart Stores Inc. started another price war Thursday, trimming the online preorder prices of some upcoming DVDs after its price cut on books last month. And, once again, competitors Amazon.com and Target scrambled to match the prices.
Walmart, based in Bentonville, Ark., said late Thursday that it would lower the online prices of new DVDs such as "Harry Potter and the Half Blood Prince” to $10.
But when Amazon reduced some DVD prices to $9.99, Walmart shot back by cutting to $9.98 as of Friday morning. Target got into the act too. All three companies also were offering free shipping.
The goal of such tactics is to drive higher volume, said BMO Capital Markets analyst Wayne Hood. He noted that Walmart and Target can afford to lower prices because of low-cost distribution models.
But not all retailers appear to be engaging in the tug of war.
Hood said it is important for Walmart’s rivals to remain competitive on price, but trying to undercut Walmart, with its huge scope and buying power, is a losing game. "On an everyday basis, customers expect Walmart to be the benchmark or standard for pricing,” he said.
Walmart’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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