Ruling may hurt discount pricing
Wilson
Ruling may hurt discount pricing
By Christine Dugas, Jayne O'Donnell and Laura Petrecca, USA TODAY
Bargain hunters may find fewer deals on high-end apparel, accessories
and electronics following a Supreme Court ruling Thursday.
The 5-4 decision overturned a 96-year-old law that prevented
manufacturers from setting minimum retail prices. The majority wrote
that lifting the pricing ban could benefit consumers if retailers offer
better service or selection.
Richard Doherty of technology market researcher The Envisioneering Group
agrees, saying the price ruling could lead retailers to use more free
products and better service as sales incentives. "It's sure to be to
consumers' benefit this summer and through Christmas."
Others predict a different result. "Many prestigious brands will use the
decision to require retailers to sell at a specified price," says
Washington, D.C., antitrust lawyer Steve Feirman. "Suggested retail
prices had to be suggested to be lawful. Now, they can be mandatory."
Consumer advocates say that will be costly to shoppers. "Over the long
term . discounters will be squeezed out of the market," says the
Consumer Federation of America's Mark Cooper.
Antitrust lawyer Joe Sims expects limited impact from the ruling.
Manufacturers now may set prices, but it will be costly to monitor and
enforce that price distribution, says the Washington, D.C., lawyer. And,
he adds, if the price is too high, they'll lose customers.
The lawsuit arose when Leegin Creative Leather stopped shipping its
Brighton tooled-leather accessories to Dallas-area shop Kay's Kloset
because the store was selling the goods more cheaply than Leegin wanted.
After Leegin cut the store off, PSKS, parent of Kay's Kloset, filed an
antitrust lawsuit.
Burlington Coat Factory, which filed a brief supporting PSKS, worries
about the impact on the off-price chain. Burlington attorney Stacy John
Haigney called the decision "an open invitation to manufacturers and
full-price retailers to fix retail prices at a higher level. It will be
detrimental to our business, but I really can't tell how much."
The Consumer Electronics Association says it supports the court decision
because, it says, "sales training, industry marketing and after-sales
service" are what many TV and audio gear buyers look for in electronics
stores.
Bill Gates, of golf equipment maker Ping, says, "Not every consumer is a
bargain shopper. Some consumers are looking for quality, innovation,
personalization and customer service when they shop."
Shawn Hirn
"Wilson" <wil...@universal.com> wrote:
> http://www.usatoday.com/money/industries/retail/2007-06-28-supreme-co...
>
> Ruling may hurt discount pricing
>
>
> By Christine Dugas, Jayne O'Donnell and Laura Petrecca, USA TODAY
>
>
>
>
> Bargain hunters may find fewer deals on high-end apparel, accessories
> and electronics following a Supreme Court ruling Thursday.
>
>
> The 5-4 decision overturned a 96-year-old law that prevented
> manufacturers from setting minimum retail prices. The majority wrote
> that lifting the pricing ban could benefit consumers if retailers offer
> better service or selection.
I don't see what the big deal is. I have read plenty of comments from
retailers that they would love to offer lower prices, but the
manufacturer wouldn't permit it.