A discount store is a retail operation that offers goods for sale that are less expensive than comparable items at traditional department stores. The discount store may carry a wide range of clothing and household goods or sell only one type of item, such as office supplies, shoes, beauty products or electronics. Some discount stores are parts of chains or franchises, and others are independently owned.
Unlike the popular 99-cent stores that are commonly found throughout the world, a discount store typically sells mainstream brands that are well-known to local consumers. The marketing strategy of a discount store generally heavily relies on their prices being lower than another store in the same region. Some discount store proprietors prominently advertise that their store’s prices will beat any competitor’s advertised price. A significant number of these stores also promise a percentage discount above and beyond the cheaper retailer’s price.
Although discount stores are found in most industrialized countries, the United States is generally considered the leader in the development of discount retail store operations. This trend is normally attributed to the consumer need for affordable goods that accompanied the aftermath of World War II. Many major retailers found during this time that their clientele no longer had the spending power they enjoyed in the pre-war era and created discount departments often referred to as bargain basements.
From the 1950s until the early 1990s, discount stores proliferated. Most cities, towns, suburbs and rural areas had at least one discount store. By the end of the trend, Target, K-Mart and Wal-Mart emerged as the top three discount store retailers in the United States.
Interestingly, these three retailers all opened their first stores in 1962. Around that same time, other major retail stores such as Montgomery Ward, J.C. Penney and Woolworth, created discount branch operations under similar names to the original stores. By the early 1980s, most of these ventures had closed due to low sales. Some went out of business, and others were sold to larger, thriving competitors.
The latest development in the evolution of discount stores was the mid 1990s creation of the superstore or supercenter. This retail location format typically has a grocery store and general merchandise store under the same roof. Many large discount retailers adopted this structure.