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Discount Stores > History of Discount Retailing

 

Early Discount Stores

discount stores - price cut concept Discount stores date back to the late 1940s and early 1950s, just after the end of World War II.  They were conceived during the post-war economic boom, to serve the consumer needs of baby boomer families.  Designed to operate with low price markups and basic service levels, they try to compensate by achieving high sales volumes and fast merchandise turnover.  One of the earliest discount stores was E. J. Korvette's, which developed the discount pricing model during the early 1950s.  For an in-depth pictorial review of early discount store history, please visit Discount Stores of the 60s.

Modern Discount Stores

The modern discount store chains were born in 1962, when the leading discounters we know today — Kmart, Wal-Mart, and Target — began operations.  Sam Walton owned a small chain of variety stores in Arkansas and Kansas, and was facing competition from regional discount stores.  Sam studied this new retailing concept carefully and started the first Wal-Mart store in Rogers, Arkansas with a vision that the American consumer market was adopting a different kind of general store than the Woolworth and S. S. Kresge "5 and 10" stores that had been so popular during the 1950s.

Some discounters such as Kmart expanded quickly nationwide during the 1960s, but Wal-Mart only built 15 stores.  After going public in 1970, Wal-Mart expanded to 276 stores during the 1970s, to nearly 1,400 stores during the 1980s, and to more than 10,000 stores around the world in mid-2013.

discount store shopping illustration

Discount Department Stores

Today, the discount retailing industry comprises about five thousand stores with average revenues of about $26 million per year.  Wal-Mart, Target, and Kmart — the top firms in this industry — enjoy competitive advantages due to their purchasing power, distribution networks, and marketing abilities.

Discount department stores stock a broad selection of consumer goods, including apparel, personal care products, electronics, groceries, and toys.  In contrast to traditional department stores, where each department has its own service staff and checkout registers, discount stores feature a bank of checkout registers near their store exits.  After browsing through the store, customers can easily purchase all their shopping cart items in a single transaction.

Most discount stores include apparel and footwear for women, men, and children.  They carry a wide variety of name brand cosmetics plus health and beauty products in a self-service merchandising format.  In certain cases, in-store pharmacies offer prescription drugs at discount prices.  Some of these stores feature quality kitchen, bed, and bath products from major manufacturers while others offer more basic housewares lines.  Consumer electronics departments at these stores feature video and audio electronics equipment, and they may offer computers, cameras, and photo processing services as well.

  • Wal-Mart
    This leading chain of discount stores features a broad selection of consumer products at everyday low prices.  Wal-Mart operates several divisions including Wal-Mart Stores, SAM's Club, Wal-Mart Supercenters, and Walmart.com.

    Wal-Mart Stores is a national discount retailer offering a wide variety of general merchandise.  Wal-Mart Supercenters feature convenient one-stop family shopping, combining a full line of groceries and a general merchandise department in one store.  SAM's Club is a members-only warehouse club with locations around the USA.  Walmart.com is an online shopping site that features a good selection of quality merchandise at low prices.
    www.Walmart.com
  • Target.com
    This retail growth company is focused on providing excellent value to American consumers through upscale discount stores and this on-line shopping site.
    www.Target.com
  • Kohls
    Features clean, bright department stores stocked with most everything you need for yourself and your home.  Offers quality, national brand merchandise at competitive prices.
    www.Kohls.com
  • Costco
    Costco Wholesale Corporation operates a chain of membership warehouses, primarily under the "Costco Wholesale" name.  These warehouse stores carry quality, brand name merchandise at lower prices than are found at many other wholesale or retail sources.  The warehouses are designed to help small-to-medium-sized businesses reduce costs in purchasing for resale and for everyday business use.  Individuals may also purchase items for their personal needs.
    Costco warehouses feature an extensive selection of product categories including groceries, candy, appliances, media, automotive supplies, tires, toys, hardware, sporting goods, jewelry, watches, cameras, books, housewares, apparel, health and beauty aids, tobacco, furniture, office supplies and office equipment.  Costco carries quality national and regional brands at discounted prices.
    www.Costco.com

Outlet Shopping

In recent decades, the factory outlet store has offered price-conscious consumers an alternative to discount store shopping.  Often grouped into large factory outlet malls, Outlet stores are popular shopping destinations that feature brand name merchandise at deeply discounted prices.
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