3
Mar

Minimal Prices are Essential

Escrito el 3 marzo 2009 por Jesus Guerro en General

In the middle of the War of Prices in the Retail Distribution Sector, It is suitable here to underline the problem of “Minimal Prices”. Some associations (olive oil cooperatives are being the most active) are claiming close to the courts that some Retailers are selling the product under cost. The Chain can do it with some basic products to attract customers offseting margin profitability in other ones. But indeed, they are puting in danger the entire sector. Although agreements between suppliers and Buyers in the establishment of Minimum Selling prices are not legally allowed they are a reality and the Chain uses to respect them in order to protect the pricing policy of the supplier. Otherwise, it colud burn out in all its sales chanels.
However these “non-written” agreements are more difficult to be maintained in the case of “Distributors Brand” causes of it is supposed that the supplier image is not affected. But in the long term some primary sector comapnies will be in danger if nobody does nothing.

Comentarios

jose luis 5 marzo 2009 - 11:31

Hi Jesús,
Let me attach a new regarding latest movement in the price-war. Now is Carrefour cutting prices up to 25%. I don´t know how it will end but as user, I am expecting savings…
http://www.elmundo.es/mundodinero/2009/03/05/economia/1236240340.html

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