The Supreme Court ruled yesterday that manufacturers and distributors were no longer banned from agreeing together on a set minimum price for retail goods.
The decision will give producers significantly more leeway, though not unlimited power, to dictate retail prices and to restrict the flexibility of discounters.
Goodbye, Wal-Mart?
This law, that had been in place for nearly a century, is considered pertinent to maintaining competition among stores and, therefore, keeping prices reasonable. However, despite the 4 dissenting judges who agreed with the 37 states on this point, 5 judges decided that overturning this ban would, in some instances, increase competition and subsequently better service.
Now, in some ways I can see how this will work for brick-and-martar stores. For example, with set minimum prices agreed upon by manufacturers and distributors, anyone looking to open up their own retail store will be able to project more easily a return on their investment. However, other retailers (discount stores and Internet Stores) can be hurt by this.
What do you think this means for your shopping pleasure? While I wouldn't go out of my way to go "bargain shopping" (I think it's ridiculous to drive an extra 10 miles to save 10 cents a pound on ground beef) I see my beloved discount stores being forced to raise their prices to match the manufacturers' demands. I'm unsure what this will do retailer competition.
Well, maybe if there aren't price floors, we won't need discount stores. Hooray free market competition and the judges who legislate from the bench!
--Mike
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Personally, I think you are correct in your assumptions that it will hurt the discount stores like Dollar General, Dollar Tree, Walmart, etc. The discounts wont be so deep anymore.
It may not act to boost the economy either. People may hang onto their money a lot tighter or look for other buying avenues.
Where I live, the people do drive 10 or more miles to shop at a discount store(s) bc the city, Galesburg, Ill. has so many taxes imposed upon the purchases made here; even gasoline. The city is in severe debt and doesn't manage money well at all, so more and more taxes have been put on the people here.
Also, freedoms are being taken away to the extent that people must put a tarp on any vehicle parked in their driveway that is not being driven. It has gotten really bad here. But anyway, yes, I do see that the new law will make a big difference in how people spend their money, where they shop, etc. It is a little scary. I wonder what the stores will do about clearance items that they are trying to get rid of? If this happens, Ebay sellers may get more buyers looking for a bargain. A lot of ebay sellers already buy pallets of merchandise goods that the stores couldn't sell and then they turn around and sell the items at a low cost...maybe I need to get an account and start selling on ebay...
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