According to the Wall Street Journal, the war is between Amazon and Wal-Mart. It started last Thursday when Wal-Mart started selling its 10 most anticipated hardcovers for $10 each when pre-ordered online. Amazon promptly matched the offer. So Wal-Mart countered by slicing its price to $9. Amazon followed suit. Then Wal-Mart, determined to have the lowest online price, dropped theirs to $8.99.
David Young, chief executive of Lagardere SCA's Hachette Book Group, said he and other publishers “feared the online pricing could hurt small independent book sellers and big retail chains.”
How could it do that?
If the industry's top books continue to be sold for $9 online in the future, 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.Barnes & Noble and Borders are not matching these online prices. For the most part, the big bookstore chains are not talking.
The veteran publisher said when major retailers are allowed to sell below cost, it represents an aggressive form of price deflation that creates "all sorts of disturbances in the market." He noted that in France it is illegal to sell a book below cost, adding, "I would welcome similar legislation here."
Most U.S. executives at the fair declined to speak publicly about the price war, for fear of offending either of the retailers.