5.2: Reaching the End Consumer within a Free Market - Retail, Deep Discounters

Question 1

How do deep discounters offer permanently low prices?

Answer 1

• keeping their costs down

- take a lower profit margin than traditional supermarkets, relying instead on the volume of sales for their profits

Question 2

How do deep discounter keep costs down?

Answer 2

• basic shops (pallets instead of shelves)
• away from prime retail locations (lower rents)
• limited product range (cheaper to maintain)
• rarely stock major brands
• work with lesser known producers
• buy direct from producers

Question 3

How do deep discounters attract consumers with stronger interest in wine?

Answer 3

• sell small amounts of expensive wine

- consumer might try a less expensive wine and come back for it