Quote:
Originally Posted by taustin
And yes, this is a standard retail business practice, and has been for a century or so. Everybody does it, because those who don't, don't last long.
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I suggest reading
The Great A&P and the Struggle for Small Business in America
http://us.macmillan.com/thegreatapan...a/marclevinson
From what I read there, so long as it was family owned, A&P operated with a low everyday price policy, avoiding promotional pricing. That seems to me to mean no loss leaders.
There's a story related in the book where a competitor from somewhere in the Midwest wrote to the A&P home office in New York complaining that his local A&P locations were pricing some items below cost, trying to put him out of business. The home office then went to great lengths to investigate, prove the competitor correct, and discipline the local A&P managers.
And A&P was then the world's largest retailer.
After the long-time pair of family managers died, A&P went the promotional pricing route and basically died. Now it is a local grocer, mostly in the New York City market.
I'm not saying loss leader pricing retailers always die. But I do think there are other ways to go.
US retailers of today experiencing success without predatory pricing include Wegmans and Costco.
Except for price matching, I don't see WalMart pricing food below cost:
http://www.simplifylivelove.com/usin...ve-at-walmart/. Not sure about books.