Carmen Lam Karen Lam

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Econ news analysis

Anti-competitive behaviour:

Quantity discount

Fiona Kam 6A (19)

Carmen Lam 6A (20)

Let’s watch a video first!

• http://thesun.on.cc/cnt/news/20111120/00407_040.html?pubdate=20

111120

草根超市勁平一成 東方日報

20-11-2011

• 首間標榜平民化以服務草根階層為主的超級市場,昨在 新蒲崗開

業 ,超市大老闆強調所有貨品免收入場費及上架費,故售價可較

一般超市便宜一成,十分具競爭力,更計劃未來半年在港九新界

再開多間分店。

• 這間標榜是 「平民超市」 的 美家超級市場有限公司 ,其董事局主

席陳勇前透露,首間超市面積約七千平方呎,總投資額一千萬元,

服務對象以公屋住戶及中下層市民為主 ,雖然他們的消費能力比

較低,所需求的貨量卻非常龐大。因應市場所需, 所有貨品都不

收入場費,亦沒有上架費,出售貨品均大量入貨,每次一兩隻貨

櫃,故售價可較一般大型超市便宜約一成,部分自家品牌貨品折

扣高達三成,零售及批發兼備 。

• 他說從不擔心競爭力,本港存在多個中高價超市或標榜平價的連

鎖商號,美家的最大優勢是不收入場費及上架費, 得到大部分供

應商支持,貨品比別家便宜 。

• 場內貨品超過三千種,只要吸引足夠客源,便能將利潤降至最低,

讓草根階層受惠。

Stakeholders

Wholesaler

Retailer

Consumers

Identify stakeholders

Example

Food supplier

( 糧油食品供應商 )

Small scale supermarket

( 美家超級市場有限公司 )

Middle and low income households

3

1

Wholesaler

Buy in bulk

2

Quantity discounts

 Buy at a lower price

Retailer

Sell at a lower price

Buy at a lower price

4

Definition of quantity discount

• Retailers receive larger discount from manufacturers or wholesalers when they buy good in bulk

Discounts are given to supermarket when it purchases in bulk (one to two container each time) with the same wholesaler

Effect on retailer (supermarket)

• Bring benefit to the supermarket

 Save information cost of searching for other low-price products in other wholesalers

 Enjoy purchasing economies of scale , when it buys products in bulk, lower average cost of production

 greater incentive to display and sell more of the product

(e.g. eggs, rice) from that wholesaler due to consumers’ greater demand for its goods

 Quantity discount causes a drop in selling price of products,

% rise in Qd > % drop in price,

TR rises

Effect on other retailers in the market

• Harm their business = earn less profit

 newly opened supermarket ( 美家超級市場 ) obtains quantity discount

 Sell its products at a lower price

 Attract more consumers to buy from this supermarket

 Other retailers cannot compete with this supermarket = lose consumers

= 美家超級市場 restrict competition

Effect on consumers

• Consumers benefit

 Products are purchased in bulk = lower production cost

 Supermarket will reduce selling price in most of its products

(evidence: in general, selling price is lower than other dominant supermarkets by 10% )

 Consumers can buy cheaper goods in this supermarket due to lower production cost (in purchase) from retailer

 Lower price raise their demand (=MB) for the goods in this supermarket

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