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.
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