A report from Reuters said the Wal-Mart Stores, Inc. (NYSE:WMT) has decided to stop selling Kindle products from Amazon.com, Inc. (NASDAQ:AMZN). The move indicates the growing competition between the two companies.
The world’s largest retailer issued a memo to its store managers yesterday, regarding the new policy of the company, pointing out that consumers are more interested in purchasing other mobile devices. The company also emphasized that its decision was in line with is overall merchandising strategy.
The memo reads,” We have recently made the business decision to not carry Amazon tablets and eReaders beyond our existing inventory and purchase commitments. This includes all Amazon Kindle models current and recently announced.”
A spokesperson for Wal-Mart confirmed the memo. Wal-Mart Stores, Inc. (NYSE:WMT) said it will continue to sell a wide range of mobile devices from other manufacturers such as Apple Inc. (NASDAQ:AAPL) iPads and Barnes & Noble, Inc. (NYSE:BKS) Nook tablets, as well as different kinds of electronic gadgets and accessories.
The search results for “Kindle” on Wal-Mart’s website offered cases and screen protectors for the product and other e-readers, and tablets from other companies. A similar search result appeared when consumers type Kindle on the website of Sam’s Club, a warehouse chain subsidiary of Wal-Mart Stores, Inc. (NYSE:WMT).
Wal-Mart Stores, Inc. (NYSE:WMT) is not the only company that stopped selling Kindle products. Target Corporation (NYSE:TGT) made the first move, citing that its stores are not showrooms for Amazon’s Kindle products. Target pointed out that it is not willing to let online-only retailers to use its brick-and-mortar stores as a showroom for their products and destabilize its prices.
According to a previous report from the New York Times, Target and other big retailers have been trying to find ways to discourage Amazon shoppers from checking out different products in their stores, before buying them online at Amazon.com. The largest online retailer promotes the practice, particularly during the holiday season by offering a 5 percent discount on any item scanned at retailer stores, using its price check app.
Amazon recently introduced its new line of Kindle devices, including its three types of Kindle Fire HD SKU and the Kindle Paperwhite eReader. Analysts estimate that Amazon.com would be able to sell approximately 2.3 million Kindle units during the second half of 2012. With Wal-Mart’s latest decision, the Washington-based online retailer might have a hard time meeting the sales forecast.
In addition, Amazon.com’s, Inc. (NASDAQ:AMZN) sales in California may also be affected by the state’s latest decision to collect sales tax from online retailers, which started on the 15th of this month.
Wal-Mart’s stock price increased by 0.50 percent to $74.74 per share, while Amazon shares were down by almost 1 percent, to $295.29 per share, during the afternoon trading on Thursday.