Wal-Mart Denies Web Site Reports
The nation’s largest retailer on Thursday denied a CNBC report that it would open a greatly expanded online retail site today that will directly confront such aggressive Internet interlopers as Amazon.com.
“That report is completely inaccurate,” Wal-Mart Stores Inc. spokeswoman Melissa Brown said. “We’re always listening to our online customers and we’re focused on meeting their needs, but we’ve not talked about anything like [the CNBC report].”
Speculation about how quickly Bentonville, Ark.-based Wal-Mart would upgrade its online business has grown in recent months as Amazon.com and other Internet retailers have expanded their online services and marketing budgets. Brown, however, declined to outline Wal-Mart’s online timetable: “During the coming year, we will have some exciting news to share about some significant changes in the way that we approach some of our [online] programs.”
The CNBC report prompted prices of online stocks to fall noticeably on Thursday, as investors apparently worried that the huge retailer is now ready to flex its muscles online. Amazon.com closed down $7.06 at $105.06 in Nasdaq trading.
In contrast, Wal-Mart finished up $1.13 at $45.50 in NYSE trading after Bank of Tokyo-Mitsubishi Ltd. reported that U.S. retail sales rose a larger-than-expected 6.8% in May. Wal-Mart’s May sales rose 7.7%.
CNBC’s report underscores growing tension between Wal-Mart, which is credited with reshaping the brick-and-mortar retail world, and Amazon.com, which recently began to stock CDs and medicine on its online shelves.
The two companies recently settled lawsuits involving the hiring of former Wal-Mart Information Systems executives by Drugstore.com, which is funded in part by Amazon.com. The suits centered on executives who were privy to proprietary computer systems and business processes at Wal-Mart. Amazon.com agreed to reassign the former Wal-Mart employees, but its court papers alleged that Wal-Mart wanted to keep executives from leaving in order to buy time for its “‘own faltering online offering.”
Observers say that, while Amazon.com has made inroads against such competitors as New York-based Barnes & Noble Inc., Wal-Mart undoubtedly would be a formidable rival in cyberspace.
“My understanding is that Wal-Mart intends to become the dominant retail Web site in a couple of years,” said Kurt Barnard, publisher of the Upper Montclair, N.J.-based Barnard’s Weekly Retail Marketing Report.
“I haven’t seen the site and don’t know what it will be like,” he said. “But I do know that whatever Wal-Mart does, it does by plunging in with both feet and by using every resource at its command. Wal-Mart does not do things by halves.”
