by Greg Krehbiel on 18 March 2013
It’s a very common practice in retail to have an expensive “regular retail price” that few people pay because the product is often on sale for far less.
I just read that was a consequence of Nixon-era price controls. Retailers didn’t want to be caught with their prices too low, so the “regular” price was set artificially high. This introduced inefficiencies in retailers’ operational models.
Walmart’s “everyday low prices” are an effective response to this because it gets rid of some of the operational distortions.
Obviously there were a lot of factors that made Walmart successful, but perhaps one of them was Nixon’s price controls.
-- 2013-03-18 » Greg Krehbiel