Word: discounts
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Dates: during 1950-1959
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...getting so that anyone is just a damned fool to buy anything at retail," said James Shea, a big Dallas electric-appliance distributor. Shea, like many another U.S. appliance jobber, is finding that more & more of his business is coming from "discount houses" which offer everything from washing machines, refrigerators and TV sets, down to fountain pens, at 20% to 30% below list price...
...discount house is the biggest current phenomenon of U.S. merchandising. It has department stores, small dealers and other established merchants worried sick. To meet the "I can get it for you wholesale" competition, many established dealers have had to cut their own prices. One Chicago department store recently cut $335 General Electric refrigerators to $229, just $4 above actual cost. Said an executive of a Chicago merchants' association: "I would estimate that 90% of nationally branded major appliances are sold below the list price...
...Discount houses have sprung up all over the U.S. because of 1) the big postwar increase in appliance stores which crowded the field and made things ripe for cutthroat competition; and 2) the U.S. Supreme Court's breach in fair-trade laws a year ago. Like after-hours saloons, discount houses often issue "membership cards" to their customers. Some discounters have little more than a small office and a catalogue; the customer orders from the catalogue, and the discounter calls a distributor and has the product delivered...
Free Riders. In effect, the discount houses get a free ride on national advertising of nationally distributed brands. Few of them do any advertising of their own, beyond direct mail or the printing of catalogues. Their customers have usually got their preliminary information on comparative quality, model numbers and prices from patient clerks at department stores...
...recent years, the bank has, in effect, been a machine for inflation. It has been forced to buy at low-pegged discount rates all the government short-term bills that the commercial banks and the discount market (finance houses which deal only in short-term bills) wanted to sell. Thus, the banks have been able to get ready cash for lending whenever they wanted. From now on, the Bank of England intends to shut her purse by 1) refusing to cash the bills before maturity, or 2) cashing them at a higher discount rate. In short, the new Tory government...