CEO Mike Duke of Walmart is taking action — blowing a hole in Amazon’s US retail business by banning the in-store sale of the Kindle. (AFP/Getty Images)
Walmart doesn’t like the Amazon Effect.
The world’s biggest retailer yesterday said it will stop selling Amazon’s Kindle devices in its stores in a move that analysts said was aimed at beating back the online threat to its brick-and-mortar stores.
The announcement — just ahead of the crucial holiday shopping season — was also a form of payback. Last year, Amazon infuriated retailers by introducing a smartphone app that lets users compare its prices with those in stores by scanning bar codes.
Big-box stores detest the growing practice of consumers scoping out merchandise in stores only to buy it cheaper online, a practice known as “showrooming.”
Walmart, which said it would stop carrying all Kindles when it sold out of them in stores, follows in the footsteps of Target, which spurned Amazon in May.
So far, the retail rebellion has had little impact. Amazon said late last month that its Kindle Fire tablet had captured 22 percent of tablet sales in the US, putting it in second place, behind Apple’s iPad.
“I don’t think this is a huge setback for Amazon,” said Morten Kucey, a senior vice president at SB Capital, a retail specialist. “Anyone who buys a Kindle is already savvy technologically.”
Amazon’s shares slipped 87 cents to close at $260.81 yesterday. Walmart rose 61 cents to $74.68.
Kucey said he believes Amazon, whose customers pay no sales tax in most states, is taking direct aim at Walmart by selling products through the Kindle Fire. Amazon this month lowered the price of its 7-inch Kindle Fire to $159 from $199.
“Eventually, Amazon and Walmart will go head-to-head,” Kucey said. “It’s a matter of time.”