Golden era of discounting awaits in 1990s - editorial

Golden Era of Discounting Awaits in 1990s

"Welcome to 1980--The Year of the Discounter! That's right. 1980 has more to offer discounting than any other form of retailing. In fact, we expect this to be the beginning of a golden era--the Decade of the Discounter."

Those were the prophetic words used by DSN's editor in a Page One editorial on Jan. 14, 1980, to usher in the new decade. In the '80s, the discounter became the dominant retailer in America. Discount department store sales rose by about 50 percent, from some $60 billion to nearly $90 billion by 1989. They far outpaced full-price retailers in sales growth. The leading discounter then, K mart, maintained its No. 1 rank, with sales growth of over 65 percent during the decade. Wal-Mart, then No. 4, saw its sales volume increase more than 1,000 percent. Target's sales swelled by more than 400 percent in the '80s.

Growth wasn't limited to today's Big Three. Hills' sales grew some 200 percent during the decade. Caldor's more than doubled; as did Bradlees' and Venture's sales.

Retail analysts today would scoff at the idea that the 1990s can be another Decade of the Discounter. Indeed, half of the top 30 chains of 1980 are not in business today. And, many of today's leaders are in trouble.

But, I believe many of today's discounters are capable of great things. In 1980, the economy was in much worse shape than it is in today. Disposable dollars were scarce. Food prices were up. Fuel prices were climbing even faster. Yet, discounters thrived. How?

That 1980 editorial offers a clue: "Discounters have what no other retailing segment can offer: lower operating costs, more efficient procedures, larger hard line assortments, one-stop shopping, lower prices and better value."

The successful retailers of the 1990s--whether true discount department stores, specialty mass merchants, warehouse clubs or hypermarkets--will be "discounters" and they will have stayed true to the above tenets.

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