We consider a competitive version of a single-period, stochastic inventory model (newsboy-like model) in which a sequence of heterogeneous customers may dynamically substitute among several product variants when inventory is depleted. Customer choice decisions are based on a natural and classical utility maximization criterion. Each variant can be considered either as a competing product at a single retail location (e.g. different brands on the same store shelf) or as the same product sold at different, competing retail locations. We analyze and characterize the Nash equilibrium of a non-cooperative game in which the stock levels of each variant are set by competing players so as to maximize their own profits. The equilibrium inventory levels and profits are compared to those obtained by jointly optimizing inventory levels. The results provide insights into the effect of competition on stocking decisions and can be used to analyze various trading relationships between manufacturers and retailers.