Managing prices: price cutting strategies

Chapter 3 focuses on the development of “price cutting” strategies that rapidly spread after World War I. These strategies mobilized price display as a weapon for aggressive price competition and depended on the use of new techniques like batch sales and the use of specials to attract consumers. However, the widespread use of price cutting techniques led to the development of price wars that worked as both a source and an effect of deflation and economic decline. This forced retail professionals to critically examine their former practices and subsequently led to counter-measures such as “resale price maintenance” policies as well as ad hoc public regulation. Eventually these transformations produced several new pricing methods and tools, but also altered the identities of market actors (manufacturers, grocers, consumers, regulators) and modified power relationships in the US grocery market.