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 ...