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Are discount sales genuine or are they mark downs on mark ups? Several consumers are baffled by throwaway prices. However, you might be comforted to read on that rebates are largely a win-win story for both the customer and retailer. R.Sriram is the co-founder of Crossword Book Stores Ltd. and Next Practice Retail, a retail consultancy outfit. Sriram deconstructs for us the logic and efficacy of a discount sale. “To retain clientele, a retailer has to replenish his shop with the latest in the market. To procure new stock he will have to cash in on his existent merchandise, for which he will have to sell through. He cannot forecast perfectly the demand for any product; hence he will accordingly plan to sell a majority of his stock at an optimum price and the remaining at a lower margin through a discount sale. Some retailers and brands choose to dispose off old stock through factory outlets that are not located on the high streets.”

Though the thrifty are lured into stores that flash ‘dangling carrot’ tags, the only glitch as Lakshmi Chockalingam a discerning shopper points out, is that the “choice of items is naturally limited”. She adds, “I am not particularly enticed by the buy one get one free concept as it works only with products that we consume often.” She believes in store loyalty and does not search out a discount unless it is from Lifestyle or Westside.

Lifestyle like many others in its genre offers discounts as a means of clearance, confirms Rupini R, senior marketing executive. S. Udaykumar from Lifestyle Home Centre elaborates that when it comes to cost cuts on furniture there are “several factors to be taken into consideration like age of the product, etc”. For most appliance retailers though, “discounts are not a means of clearing but an opportunity to reward the customer, as in any case we do not store more than 40-50 pieces of a product,” explains B. A. Kodandarama Setty, managing director of Vivek Ltd. During the three days of Vivek’s legendary thanksgiving discount that coincides with the English New Year, Vivek covers 45 days of their turnover, but at strictly no profit. Vivek has even convinced manufacturers and credit card companies to cut their commissions so that an additional benefit is passed on to the buyer.

For stores like Saravana Selvarathinam Textiles and Rathna, every day resembles a discount season. Here, the owners’ stratagem is high volumes and very low margins all the year through. “During the Aadi sale when we slash costs further, our gain is negligible,” says Saravana Selvarathinam’s General Manager S Sivakumar.

Unlike the glitzy behemoths of Ranganathan Street, many proprietors in George Town and beyond endorse cutting back on fringes to usher more buyers with their no-frills fare. Ergo, Sowcarpet residents like Sashi Chordia are never desirous of shopping for sarees in Calcutta or scanning the papers for discounts, as they can choose from the latest designs at fair fares right in their locality as and when the need arises.

Having dissected discounts, our counsel is that one should never regret a buy, as shopping like eating affords most people a high!

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