Abstract:

The continued growth of the superstore and super chains has created chaos in the U.S. retailing markets. It has particularly taken its toll on the more traditional retail chains and at the same time created severe problems for manufacturers attempting to position themselves for the next several years. For example, a paper products manufacturer, who in the past has dealt primarily with major supermarket chains, has found two new channels of distribution upsetting his five-year plan. The first is the continued growth of the Warehouse Clubs (Sam's and Price/Costco) which sell millions of bulk packed facial and bathroom tissues, as well as paper towelling. These relatively new outlets are in direct competition with the firm's regular- supermarket customers and bring on a need for price cutting.