Will Wal-Mart Unveil Music Download Site?

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A spokeswoman for Wal-Mart Stores Inc.'s e-commerce site would not deny a New York Post report yesterday that the discounter will offer digital downloads of music this month.

The Post claimed Wal-Mart is negotiating deals with five record companies for an online music store that goes live Nov. 15 or at least by Thanksgiving. The service would compete with Apple Computer's iTunes and a similar one from Buy.com.

"At any given moment we're always evaluating new products and services that we can offer online," said Cynthia Lin, PR manager for Walmart.com, Brisbane, CA. "Digital music downloads is something we're looking at and evaluating."

If introduced in time for the holidays, digital downloads would become the latest Walmart.com offering this year after online contact lenses, DVD rentals and new gift baskets.

Lin would not disclose details on Walmart.com's digital download strategy or pricing. Those selling legally online typically charge 79 cents to 99 cents per song downloaded to computers or other instruments.

But as important as music is to Wal-Mart, the reverse is more the case, according to the Post. Wal-Mart accounts for one out of five albums sold in the United States, selling at a loss to entice customers to its stores nationwide.

Wal-Mart is the world's largest retailer. It reported revenue last year of $244.5 billion. As of Aug. 31, the Bentonville, AK, company had 1,494 Wal-Mart stores, 1,386 Supercenters, 532 Sam's Clubs and 56 Neighborhood Markets.

The retailer, which employs 1.1 million people nationwide and 300,000 overseas, hopes to get even bigger in fiscal 2004 starting Feb. 1. Plans call for the opening of 50 to 55 discount stores, 220 to 230 Supercenters, 25 to 30 Neighborhood Market stores and 35 to 40 Sam's Club warehouses. It will add 130 to 140 stores overseas.

In addition, the company next year will build three new regional general merchandise distribution centers and two food distribution centers. This will add 5 million square feet of distribution space.

Hopes for Walmart.com are high as well. Industry estimates put e-commerce growth overall this holiday season at 30 percent. That is not what the company has in mind.

"We're planning more than 60 percent growth for holiday e-commerce," Lin said.


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