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Discount stores are retail establishments that offer merchandise at prices below the recognized market level. Discount retailers are not easily defined because of the diversity of their operations. Generally the term Discounter is used in the trade to identify a store that undersells other retail stores by emphasizing self-service and using other devices to control expenses. Expense-saving techniques employed by these stores include no or limited services, such as alterations, delivery, mail or telephone orders; low-rent locations; and limited return privileges. By eliminating customer services and reducing various operational expenses, discounters can operate profitably on lower margins lower than other type of retail stores. Discount stores borrowed many of their merchandise techniques from super-markets.
Mass merchandise characterized by emphasis on (1) products whose market is not highly segmented, (2) customer who are willing to sacrifice sales assistance and store service in return for lower prices, (3) high volume and rapid stock turnover, and (4) a highly competitive marketplace.
Definition:
Discount Merchandiser, the magazine of the discount industry, defines a discount store as a departmentalized retail establishment using many self-service techniques to sell hard goods, health and beauty aids, apparel and other soft goods, and/or other general merchandise. Such a store operates at unusually low profit margins, has a minimum annual volumes. A discount store may be an independent store or a unit of a department, specialty, or variety-store chain.
Organization for Buying and Merchandising:
In departments owned and operated by a chain discount organization, buying and merchandising activities are basically the same as those previously described for chain organizations. Centralized buying prevails. Discount store buyers, however, are usually responsible for buying for several departments rather than for only a single category of merchandise. The non chain discount stores, which are far less numerous than chains, follow the same basic buying and merchandising pattern as that of similar-volume non chain department or specialty stores.
Early discounters searched the market for closeouts and special-price promotions. In many cases, their inventories consisted almost entirely of this type of merchandise. Today, however, the fashion stocks of many discounters consist of either regular goods bought in the low-end open market or special lines made up exclusively for discount operations by producers who sell their regular lines to conventional stores.
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