(c) 2009 Dow Jones & Company, Inc. Reproduced with permission of copyright owner. Further reproduction or distribution is prohibited without permission.Book publishers worried they and retail chains could be caught in the cross fire as Amazon.com Inc. and Wal-Mart Stores Inc. ratchet up their price war over online book sales.
Wal-Mart triggered the online skirmish Thursday when it began selling its 10 most anticipated hardcovers for $10 apiece when preordered on its Web site. Amazon matched the offer hours later, and Wal-Mart then chopped its price to $9. Friday morning Amazon matched that.
"I'm worried about the major book-selling chains, and I'm concerned about the implications for publishers and the public alike," said David Young, chief executive of Lagardere SCA's Hachette Book Group, one of the country's largest book publishers. He and other publishers said they feared the online pricing could hurt independent book sellers and big retail chains.
A Walmart.com spokesman on Friday said the discount giant was prepared to make further cuts. The retailer's Web site will continue to adjust its prices, spokesman Ravi Jariwala said in an email, "so that Walmart.com offers the lowest online prices." Friday afternoon, it dropped its price a penny, to $8.99.
Walmart.com Chief Executive Raul Vazquez said in an interview Thursday that the retailer "will go as low as we need to" to underscore Walmart.com's intent to be a low-price leader online. The retailer this month has sought to expand its Web presence, creating an Amazon-like online marketplace for other retailers and adding home delivery for purchases such as shampoo and diapers.
Amazon declined to comment on the price wars.
David Steinberger, chief executive of Perseus Books Group, a unit of the Washington private-equity firm Perseus LLC, said, "When your product is treated as a loss leader, it lowers its perceived value. . . . It's not great, certainly not for publishers."
Hachette's Mr. Young said the latest price cuts on best sellers, coupled with electronic-book pricing, represent a significant threat to the health of independent booksellers.
If the industry's top books continue to be sold for $9 online, Mr. Young said, it will be increasingly difficult for publishers to launch what he described as "the writers of tomorrow," because the book market may have narrowed significantly.
Hachette is receiving its customary wholesale price from Wal-Mart and Amazon, Mr. Young said. "We aren't subsidizing this in any way," he said. "Not a cent. And Wal-Mart doesn't get a special discount."
Wal-Mart's online arm is now significantly discounting its 10 most-anticipated hardcover books -- including coming titles from Stephen King, James Patterson and Dean Koontz. It said the discount applies to popular books such as Mr. King's "Under the Dome" and Sarah Palin's "Going Rogue." Mr. King's book, for example, carries a $35 price tag but is available on Amazon and Walmart.com for about $9, a discount of 74%.
The nation's two largest bookstore chains, Barnes & Noble Inc. and Borders Group Inc., each operate their own online retail sites. Neither is matching the prices now being offered by Walmart.com or Amazon.
"Our model does not rely on being the lowest-priced," said a Borders spokeswoman. Barnes & Noble declined to comment.
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Brian Blackstone contributed to this article.
Credit: By Jeffrey A. Trachtenberg and Miguel Bustillo
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