Discount Stores > History of Discount Retailing
Early Discount StoresDiscount 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 StoresThe 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 Department StoresToday, 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.
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.
Outlet ShoppingIn 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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Discount Stores - The Discount Retailer Business