Discount Department Stores

A discount store is a type of department store, which sell products at prices lower than those asked by traditional retail outlets. Most discount department stores offer wide assortments of goods; others specialize in such merchandise as jewelry, electronic equipment, or electrical appliances. Discount stores are not dollar stores, which sell goods at a dollar or less. Discount stores differ because they sell branded goods and prices vary widely between different products. Discount department stores are more popular in the United States than other countries. Following World War II, a number of retail establishments in the United States began to pursue a high-volume, low-profit strategy designed to attract price-conscious consumers.

During the period from the 1950s to the late-1980s, discount stores were more popular than the average supermarket or department store. There were hundreds of discount stores in operation, with their most successful period occurring during the mid-1960s in the United States with discount store chains such as Kmart, Zayre, Kuhn's-Big K (sold to Wal-Mart in 1981), GEM, TG&Y and Woolco (closed in 1983, part sold to Wal-Mart) amongst others. Currently, Wal-Mart, the largest retailer in the world, operates 1,353 discount stores in the United States; Target and Kmart are Wal-Mart's top competitors.
 

Examples of discount retail chain stores include Wal-Mart, Kmart and Target, all of which opened their first locations in 1962. Other retail companies branched out into the discount store business around this time as adjuncts to their older store concepts. As examples, Woolworth opened a Woolco chain; Montgomery Ward opened Jefferson Ward; Chicago-based Jewel launched Turn Style; and Central Indiana-based L.S. Ayres created Ayr-Way. These chains typically were either shut down or sold to a larger competitor during the late '70s and early '80s. Kmart and Target themselves are examples of adjuncts, although their growth prompted their respective parent companies to abandon their older concepts (the S.S. Kresge five and dime store disappeared, while the Dayton-Hudson Corporation eventually divested itself of its department store holdings and renamed itself Target Corporation).

Many of the major discounters are now opening "supercenters", which add a full-service grocery store to the traditional format. The Meijer chain in the Midwest consists entirely of supercenters, while Wal-Mart and Target have focused on the format as of the '90s as a key to their continued growth. Although discount stores and department stores have different retailing goals and different markets, a recent development in retailing is the "discount department store", such as Sears Essentials, which is a combination of the Kmart and Sears formats, following the companies' merger as Sears Holdings Corporation.

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