Wal-Mart gives CD floor space to Blu-ray

Space taken from lagging music format also given to videogames, electronics

By Danny King -- Video Business, 11/6/2008

NOV. 6 | Wal-Mart Stores is cutting its floor space dedicated to music CDs and using the space to stock more Blu-ray Discs, among other products, according to an analyst’s report.

The world's largest retailer is using space that has been dedicated to music to stock more Blu-ray discs, videogames and various electronics components, Pali Research analyst Rich Greenfield wrote in a Nov. 3 note. In the music it does continue to merchandise, Wal-Mart will focus on obtaining exclusive distribution rights as it did with the most recent Eagles album.

Wal-Mart is responding to both an overall spending cutback and more downloading off of digital services such as Apple's iTunes, which caused U.S. CD sales to plunge 23% from a year earlier for the first four weeks of the fourth quarter, Greenfield wrote. Earlier this year, iTunes overtook Wal-Mart as the largest U.S. music retailer, and Internet giant Amazon.com supplanted Target at the No. 4 spot, NPD Group reported in August.

"While Wal-Mart has had the smallest CD section of the big-box retailers for some time, it maintained a meaningful new release CD section to drive consumers into their stores on a weekly basis," wrote Greenfield. "As packaged media continues to fade, Wal-Mart is increasingly focused on acquiring exclusive rights to music content, which enables it to sell multiple products to a consumer at one time."

Officials at Wal-Mart, which doesn't break out sales of specific retail items such as music, didn't immediately respond to a request for comment.