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Home Depot Fencing Off Its Turf
 

 

 


August 5, 1999

Home Depot wants consumers all to itself.  The Atlanta-based retailer is warning its suppliers not to sell their products directly to consumers via the Web.

"We recognize that a vendor has the right to sell through whatever distribution channels it desires," Home Depot said in a stiff letter to Black & Decker, Scotts Co. and other major suppliers.

"However, we, too, have the right to be selective in regard to vendors we select and we trust that you can understand that a company may be hesitant to do business with its competitors," the letter said.

Scotts Co. which makes a popular line of lawn and garden products, said the letter "sounded like a warning."  Company officials were quoted as saying that while the Scotts Web site does not presently sell products, the company is continuing to "consider all options."

Black & Decker said it has never sold direct to consumers and does not expect to do so.  In fact, the company did operate a small number of stores in the 1980s.

Home Depot, though not yet an emerchant, is building a home improvements Web site that is expected to come online in late 1999.

Though more heavy-handed than most, Home Depot is not alone among category-killer chains in worrying about the effect of retail ecommerce.

One of the supposed consumer benefits of ecommerce is having a multiplicity of vendors for any given product.  If a few large chains are able to use their clout to restrict competition on the Internet, many of the anticipated cost savings and service improvements may be lost.

 

 

 

 

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