Some stores just can't give up the department-store-Wednesday-sale mentality:
"Wal-Mart beats it into you with their advertising, over and over, everyday low prices: 'We're constantly rolling back prices,' " Mr. Manget said. "That's what they stand for."It is difficult to switch to EDLP, rather than establishing it from the start as was essentially the case with Wal-Mart, he added. It can take 18 to 24 months to sell the proposition to consumers.
In the process, Zellers found that customer traffic in stores was declining, leading to weaker financial results, he said. This inevitably prompted the decision to drop EDLP in some areas.
"You could call it a retreat," he said. "I'd just call it a recognition that they probably couldn't compete on traffic and everyday low prices with Wal-Mart."
Wal-Mart succeeds in EDLP because it is fanatical about slashing its own costs and passing on savings with even lower prices, said John Williams of retail consultancy J. C. Williams Group.
Without constant markdowns, the world's largest retailer doesn't need to pour huge amounts of money into price changes and advertising those changes in flyers and on store signs, he said.
Posted by Kevin on March, 22 2005 at 04:00 PM
