WAL-MART, TARGET REWIND VHS FORMAT'S PHASEOUT RECOGNIZES DVD GROWTH.

Byline: Greg Hernandez Staff Writer

Wal-Mart and Target will virtually clear their shelves of VHS tapes, except for major new releases, the chains confirmed Monday, a move that underscores the country's shift to digital entertainment.

The moves, which follow the leads of Best Buy and Circuit City, are a major sign that videocassettes are quickly vanishing from the retail scene now that there are at least one or more DVD players in more than 60 percent of U.S. homes. When DVD computer capability is figured in, the number soars to 73 percent.

``DVD is growing so naturally the demand for VHS is phasing out,'' said Wal-Mart spokeswoman Karen Burke. ``It's going to vary from store to store.''

As the nation's largest retailer with more than 3,600 stores in the U.S., Wal-Mart accounts for approximately one-third of the entire home video market. The chain's decisions on the home video front are closely watched by the entertainment industry.

``It certainly signifies the end of VHS or being close to the end,'' said independent industry analyst Dennis McAlpine of McAlpine and Associates.

Bo Andersen, president of Video Software Dealers Association, called the phasing out of VHS ``inevitable'' but said it's not a bad thing for the industry.

``I look at it as more of a testament to the strength of DVD,'' Andersen said. ``Consumers are still buying their entertainment for home viewing. They are just choosing this fancy new format more regularly.''

Wal-Mart's Burke said the DVD-VHS ratio will vary from store to store.

``VHS is still a staple in many of our customers' homes and as long as there is a customer demand for it, we will continue to offer it,'' Burke said. ``We will carry it relative to demand. All of the hot movies and new releases will still be offered in VHS.''

Burke added there has been ``no decision'' to completely say goodbye to the VHS format at this time.

The more than 1,300 Target stores in the U.S. will soon begin only offering new releases and select children's titles in VHS as it continues the transition to DVD.

``It's a matter of keeping up with what our guests want and need,'' said Target spokeswoman Paula Thorton-Greear.

Three years ago, Circuit City became the first chain to discontinue VHS followed by Best Buy stores in late 2003.

``About a month ago, we also stopped selling VHS on Bestbuy.com,'' said Best Buy spokesman Brian Lucas. ``It really hasn't caused any major issues with our customers, we haven't had a lot of complaints. It's been seen as a natural progression. At a certain point, it didn't make any sense.''

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com