The HD DVD group has been hit by a major set back in the US after retail giant Target said it will only be stocking Blu-ray discs and players in its stores.

The move will be a major blow to Toshiba and Microsoft, and comes just weeks after rental chain Blockbuster in the US said it was only going to be stocking Blu-ray discs in the future when it rams up its high definition offering.

Target, America's second-largest retailer, will sell the Sony BDP-S300 for $499 in October and display it along with Blu-ray DVDs from three studios, including Sony and Disney, at the ends of store aisles.

Target is not saying why it has made the decision or whether financial incentives have been made to only choose the one format.

It has said however that Sony will be paying a fee to have its products featured in the end-of-aisle display, something that is common practice in retail.

"We are not proclaiming one format vs. the other as the preferred consumer technology, and software will continue to be available to our guests in both the Blu-ray and HD DVD format," Target spokeswoman Brie Heath said.

Target does sell Microsoft's Xbox 360 HD DVD drive as well as a Toshiba HD DVD player in its online store, however not over the counter in store.

Target will track customer feedback and adjust offerings as necessary, Heath said.