Predatory Pricing in the Retail Trade: The Wal-Mart Case

  • Donald J. Boudreaux
Part of the Topics in Regulatory Economics and Policy Series book series (TREP, volume 22)

Abstract

In 1987, Wal-Mart began selling pharmaceuticals in Faulkner County, Arkansas. Consistent with its overall retail strategy, Wal-Mart sought to sell a high volume of pharmaceuticals at low margins. Wal-Mart’s explicit policy was to never be undersold on a pharmacy item. Although the manager of each local Wal-Mart pharmacy had no authority to raise prices above those set at Wal-Mart’s headquarters, each manager was permitted to lower prices to beat those charged by rival retailers even if these prices were lowered below the wholesale prices paid by Wal-Mart for the individual items it retailed.

Keywords

Depression Aspirin Marketing Assure Expense 

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Copyright information

© Kluwer Academic Publishers 1996

Authors and Affiliations

  • Donald J. Boudreaux

There are no affiliations available

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