Report Outline
Growing Prevalence of Price Cutting
Impact of Fair Trade Laws on Retailing
Developments in Marketing Methods
Growing Prevalence of Price Cutting
Number and characteristics of Discount Houses
Rise of the discount house—a retail merchandising establishment that sells a wide range of goods at fixed percentages below standard prices—marks a radical change in marketing methods. The change may lead to widespread development of a new kind of supermarket, with a reduction in distribution costs that will bring lower prices to consumers at all retail outlets. Meanwhile, price competition from the discount house has caused consternation among regular retailers, whose business operations are dependent on relatively wide profit margins.
The retailers have no effective means of combating the competition of discount houses, except to bring pressure on manufacturers and wholesale distributors to shut off the price cutters' supply lines. But although a number of producers have been making determined efforts to maintain established resale prices on their goods, most discount stores have encountered little difficulty in obtaining enough merchandise to stay in business.
Application in 45 states of fair trade laws which permit fixing of minimum retail prices on certain branded goods, and the strengthening of those laws by recent actions of Congress and the Supreme Court, might have been expected to halt the spread of discount selling. However, the reverse has been true; the forces of competitive enterprise appear to have gained the upper hand over restrictions on price cutting. |
|
