Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 SEGMENTS: LOSS LEADER SEGMENT / MULTIPLE YEAR-ROUND PRODUCTS
CHOICE 3 COMPONENT: CHANGE THE LIST PRICE
| No. | SIC | Year | Notes |
| 1 | 5311 | 1999 | Duckwall-Alco's pricing strategy is to slash prices permanently on selected high-volume products. This draws customers in consistently. This has allowed the company to save on advertising and allow it to operate efficiently. |
| 2 | 5331 | 2008 | Wal-Mart Stores Inc. said it will sell 90-day supplies of more than 300 generic drugs for only $10, taking aim at the burgeoning mail-order pharmacy business by undercutting their prices on some drugs and speeding delivery. The majority of the 350 generic drugs that Wal-Mart sells for $4 will be available at $10 for a 90-day supply. |
| 3 | 5411 | 1985 | To compete against Cub Foods (warehouse PRL), Kroger started selling milk for 99 cents a gallon or 50 cents below cost. Bread prices were cut to 20 cents a loaf, and prices on dozens of other items fell below cost. |
| 4 | 5411 | 1988 | Food Lion sells key staples at or below wholesale cost. "We sell all coffee at cost, all shortening, baby food, cat food, dog food, detergents." Margins on other goods are comparable or slightly smaller than other markets. |
| 5 | 5411 | 2005 | As busy consumers are no longer willing to scour the weekly ads for the best deals at grocery stores, many stores are moving towards the Wal-Mart model of everyday low prices. Raley's reduced the prices of 7,000 items in its stores, while Giant Eagle, Piggly Wiggly made similar reductions. Often, these price cuts are significant. However, they apply to no-more than 15% of the total inventory and typically include goods like toothpaste and toilet paper. |
| 6 | 5411 | 2009 | Last month, mid-Atlantic grocer Weis Markets, which operates 155 stores, lowered or froze prices on 2,400 targeted staple items. For example, a box of Quaker cereal dropped to $3.35 from $4.19, and boneless chicken breasts fell to $2.59 a pound from $3.79. |
| 7 | 5812 | 1991 | Taco Bell is credited with starting the latest price war. In 1989, Taco Bell took six items, including the 79-cent and 89-cent burritos and tacos and fixed the prices at 59 cents. Sales increased by 27% in 1989 and profits by 38%. |
| 8 | 5912 | 2008 | Wal-Mart Stores Inc. said it will sell 90-day supplies of more than 300 generic drugs for only $10, taking aim at the burgeoning mail-order pharmacy business by undercutting their prices on some drugs and speeding delivery. In addition, it is adding a second pricing tier to a heavily discounted program for more-expensive medications geared toward women's health. It is adding $9 generic prescriptions for up to a 30-day supply on a handful of drugs for treating osteoporosis, breast cancer, menopause, and hormone deficiency. |
| 9 | 5912 | 2008 | Wal-Mart Stores Inc. said it will sell 90-day supplies of more than 300 generic drugs for only $10, taking aim at the burgeoning mail-order pharmacy business by undercutting their prices on some drugs and speeding delivery. Since launching its $4 generic drug program in September 2006, Wal-Mart has seen pharmacy sales grow as a percentage of its overall sales. In the fiscal year to Jan.31, health and wellness sales, including prescription and over-the-counter drugs, accounted for 9% of US sales, up from 8% years before. Analysts estimate drugs account for 50% of those sales. |
| 10 | 5945 | 1985 | Toys R Us takes a low mark-up on hot toys which account for only a few hundred of the 15,000-18,000 it stocks. The rest sell at a markup of about 30% which is still below the 50% that the smaller specialty toy stores usually get. In addition, Toys R Us sells infant formula and disposable diapers at or near cost to lure mothers into the store. As a result as much as 35% of the company sales are from the slim or no profit items. |
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