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Irish Independent - Business Week - - FRONT PAGE -

DO price wars be­tween var­i­ous dif­fer­ent retailers have a role?

PRICE wars are al­ways con­tro­ver­sial and some­times can lead to fa­tal­i­ties ei­ther among sup­pli­ers who are bear­ing the cost of them or one or other re­tailer who can’t sus­tain the pace.

It is when there is dis­pro­por­tion­ate scale and size in­volved in a price war that it be­comes dan­ger­ous. In other words, if you have one very large re­tailer tak­ing on one that is smaller that might not have the re­sources to de­fend them­selves, that can be­come tricky.

The whole rea­son that price war breaks out is that con­sumers ob­vi­ously re­spond to value and the retailers uses this to drive foot­fall.

Some­times that foot­fall does not just go in the door of one re­tailer alone, but all those in a par­tic­u­lar re­gion.

I can re­mem­ber when we opened our first store in Dun­dalk, and there was a lo­cal re­tailer called McCourt’s.

I can still dis­tinctly re­mem­ber on a daily ba­sis low­er­ing the price of corn­flakes to the point where I had of­fered to pay cus­tomers for ev­ery packet of corn­flakes they brought into the shop.

I wanted to en­cour­age my par­tic­i­pants to buy up all the cheap corn­flakes my com­peti­tor was sell­ing and to cost him a lot of money. A bit of fun re­ally.

This type of ac­tiv­ity had gone on for sev­eral weeks, much to the de­light of our cus­tomers, when one day the parish priest ar­rived in of­fer­ing to me­di­ate be­tween both retailers. He had just vis­ited McCourt’s owner also.

While I thanked him for his in­ter­ven­tion, I pointed out that the shop had never been busier and trade was boom­ing. With a rather puz­zled look on his face, he re­ported that the owner of McCourt’s had re­ported the same.

Prob­lem SolverSEND YOUR SMALL BUSI­NESS QUES­TIONS TO HIM­SELF@ FEARGALQUINN.IE

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