The Price Wars Cometh – The Oldest Retail Pricing Strategy Prevails

Well, we are told we are having a bit of a deflationary challenge as of late. Indeed the hyper-inflation predicted didn’t seem to pan out. Will we double dip – could be, as the FED and our government’s leaders work to help re-build this global economic fiasco and mess. The EU, Japan, and Chinese Government have been busy trying various strategies to save their economies. Now, as each works on survival, we see that US retailers are battling it out in price wars. “the low-cost, high-volume strategy” appeals to more than a few of the top retailers – Walmart for instance.

Indeed, Walmart has lowered prices on 22-major food items, laundry soap, socks, and many other products amongst its 188,000 skews in its Super-Stores. It seems the Dollar Type Stores have been rapidly growing and encroaching in their dominance. But that’s not the only price warfare going on; we see Lowe’s and Home Depot (my brother-in-law has now nick-named it Home Cheapo!) are putting out mega-sales. BBQs, lawn mowers, tools, patio furniture, garden goods, you name it, it seems both retailers are aggressively discounting. Maybe Lowe’s is working to rebrand itself; Low Home Prices?

Where are all these low-priced goods coming from? Not the US, for the most part they are coming from China, US Brands and products made on the “Factory Floor” which is now China, or from Mexican Factories. Check to see for yourself some time, go to any of the large retailers; Best Buy, Target, Walmart, Home Depot, Kmart, Sears, etc. – look at any of the products, where are they made? “Made in China” is a common sticker on such products, and you better get used to it or you can’t buy anything you want these days.

Why are all the retailers beginning to drop prices again; even the grocery stores? Well, it’s simple, they want to keep sales and revenue up and hope to make their profit numbers, year-over-year from last year’s monthly sales will keep things going. This strategy typically works, and yet, we are also looking at the reality that our trade deficits, money flows, and manufacturing jobs are in a world of hurt and completely out of whack. Expect more price wars in the near future, and to continue all the way through 2010 – and remember this is nothing new.

Companies competing on price is one of the oldest business strategies in the world, we should get used to it, and expect it. Please consider this. custom fuzzy socks bulk

Leave a Reply

Your email address will not be published. Required fields are marked *