Target Stops Selling Kindle as Amazon Competition Increases

Wednesday, 02 May 2012 10:46 PM

 

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(Updates with comments from analyst in fourth paragraph.)

May 2 (Bloomberg) -- Target Corp., the second largest U.S. discount chain, will stop selling Amazon.com Inc.’s Kindle brand of e-readers and tablets after two years, while continuing to offer similar products from Apple Inc. and Barnes & Noble Inc.

All Kindles and related products will be out of Target stores by the end of this month, said Molly Snyder, a spokeswoman for the Minneapolis-based company. Target will still offer Barnes & Noble’s Nook brand of e-readers and tablets and Apple’s iPad in its stores and on its website, Snyder said.

Target started selling Kindles in its stores nationwide in June 2010, touting itself as the first so-called brick-and- mortar retailer to carry the device. Since then, Amazon has become a bigger competitor, releasing the Kindle Fire, a tablet computer that allows users to shop Amazon’s entire site for goods, such as clothes, that Target also sells.

“The very tight alignment of Kindle Fire tablets with Amazon’s own online store, which is a Target competitor, likely justifies this decision,” Matt Arnold, an analyst for Edward Jones & Co. in Des Peres, Missouri, said in an e-mail. The move also makes sense as Target is installing more areas in its stores dedicated to Apple products, Arnold said.

Brick-and-Mortar

Drew Herdener, an Amazon spokesman, declined to comment.

Target fell 0.8 percent to $57.55 at 1:34 p.m. in New York. Amazon rose 0.1 percent to $229.93.

Amazon has been taking market share from brick-and-mortar retailers in a number of product categories, enabling it to grow first-quarter sales by 34 percent to $13.2 billion, compared with a year earlier. Meanwhile, analysts estimate Target will increase sales by 5.6 percent to $16.8 billion in the quarter ended April 30, according to data compiled by Bloomberg.

Amazon, the world’s biggest online retailer, has drawn criticism from observers including Republican Senator Olympia Snowe and the American Booksellers Association over its sales strategies.

Snowe said in December that Amazon should stop offering shoppers discounts to scan in products with their smartphones at retail stores and compare prices to its own site.

--With assistance from Danielle Kucera in San Francisco. Editor: Ben Livesey

To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

© Copyright 2014 Bloomberg News. All rights reserved.

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