Deep Discounters

Question 1

What are DDs business model?

Answer 1

-permanently low prices
-rare time-limited price promotions
-model being adopted by trad sms
-popular in Germany

Question 2

DDs charge low prices but keeping their costs down. How do they do this?

Answer 2

-take lower profit margin-reply on vol of sales for their profit
-shops are basic- pallets not shelves
-no major brands= more £
-work with less well-known producers w lower over heads
-away from prime locations= lower rent
-limited, streamline product range- don’t sell multiple brands of one type of product
-most are private labels- eg Charles Shaw’s ‘Two Buck Chuck’= Trader Joe’s
-when sells out= no more
=appealing to producers with surplus stock
-often buy directly from producers= no intermediary costs
-don’t charge suppliers for stocking their products
-producers don’t have to cover costs of price promostions= greater profits than sms

Question 3

What else can dds to to get a wider target audience?

Answer 3

-sometimes buy small amount of more £ wine
-especially in affluent areas/Christmas
-attracts customers with strong interest in wine to their ships
-whilst they’re there, also try cheaper wines, like them, come back for more!
-dds now increasing their share of wine market
-2018-37% Brits buy wine at dds