Discount stores offered a wide range of merchandise categories and employed a pricing philosophy that proved so popular with shoppers it would come to dominate the industry.
The earliest discount stores sought to satisfy shoppers’ everyday needs for a wide range of basic products, as well as, an assortment of discretionary items. The discount pricing philosophy required operators to be mindful of capital costs and operating expenses so as to generate an acceptable level of profitability by selling products at lower prices. This resulted in a more austere shopping experience than what customers were accustomed to at traditional department stores of the day, but the ‘no frills’ approach presented by the likes of Aldi and Lidl was a trade-off many were willing to make in exchange for significant savings.
The discount stores that emerged in the United States in 1950s represented the beginning of a new era in retailing.
Today, the stores operated by traditional discount retailers such as Walmart, Kmart and Target, bear little resemblance to the store formats of the 1960s and 1970s which propelled them to dominance in American retailing. The addition of food to their traditional product offerings has transformed many locations into large supermarkets while retailers, such as Dollar General and Family Dollar have emerged as a new breed of discount store.
Contribution to Retail History
The discount store format, which was introduced in the US in 1962 by Walmart, Kmart and Target, combined low prices, popular brands, convenience and central checkout under one roof. These “mass merchants” changed shoppers’ perceptions of value and as they evolved to became a one-stopping shopping destination that offered food, apparel and general merchandise. Other types of discount stores include such format as Aldi and Lidl as well as dollar stores such as Dollar General and Family Dollar have grown exponentially. Discount stores account for more than a trillion dollars in annual sales worldwide.