Discount Selling

August 5, 1954

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.

ISSUE TRACKER for Related Reports
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Aug. 05, 1954  Discount Selling
Aug. 10, 1951  Price Cutting and the Law
Apr. 25, 1951  Enforcement of Price and Rent Controls
Nov. 10, 1948  Basing Points and Delivered Prices
Sep. 14, 1948  Prices and Politics
May 28, 1947  Retail Price Agreements
Aug. 12, 1935  New State Laws for Price Maintenance
Apr. 03, 1930  The Trend of Commodity Prices
Retail Trade