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It is only one of many competitive tools
that help keep food prices down
It is an axiom of American business that for every new
competitive sales tool that comes along, another new one will come along , and try to surpass it. So it is with the trading stamp.
Trading stamps are only one of several competitive tools available to the merchant seeking to increase his business volume. He may give a discount for cash. He may cut some prices and feature "loss leaders." Or he may use prize contests, giveaways or other promotion devices.
All these sales tools have two things in common. First, to be successful, they must pay their own way by the creation of new business volume. Second, they cause intense competition which has the effect of helping to hold prices down even during inflationary times. Because stamps are given nationwide, marketing experts connected with universities have been able to measure this effect in the case of stamps.
Food prices in five cities where stamps were not given by supermarkets and in ten cities
where stamps were given were compared with the U. S. Bureau of Labor Statistics Price Index for the two years ending in December 1956. Food prices in the "stamp" cities rose less than the national average. Price increases in "nonstamp" cities were more than the average. No evidence was found that stamp stores, as a class, charged more than non-stamp stores.
It seems clear that in these inflationary times the trading stamp is needed to work side by side with the many other competitive tools also helping to keep prices down.
★ ★ ★
REFERENCES : "Status of Trading Stamps in Food and Drug Stores." Selling Research, Inc., New York, 1957.
"Competition and Trading Stamps in Retailing." Dr. Euo-ene R. Beem, School of Business Administration, University of California.
This message is one of a series presented for your information by THE SPERRY AND HUTCHINSON COMPANY, 114 Fifth Avenue, New York 11, New York. S&H pioneered 62 years ago in the movement to give trading stamps to consumers as a discount for paying cash. S&H GREEN STAMPS are currently being saved by millions of consumers.
Broadcasting
May 12, 1958 • Page 73