Demand for Discounters

Accepting the dictum that ''if you can't lick 'em. join 'em," old-line retailers are turning into discounters themselves. Discount sellers, who operate with a markup of 19% to 24% (v. 39% in department stores) have already captured nearly one-third of the nation's department store trade; and FORTUNE predicts this week that their sales in 1962 may well rise another 50%, to $7 billion. Two of the biggest U.S. department store chains--May and Allied--have branched into discounting. So have food chains such as Grand Union and Kroger, and five-and-dimers such as Woolworth and Kresge.

Into the ranks of the discounters last week moved 1) another major dime store group, 2) the world's largest drugstore chain, and 3) the world's largest food store chain. Items: > The W. T. Grant Co. will try to stem a sales slide at two stores--in Jersey City and in Milford. Conn.--by turning them into discount houses.

>Chicago's Walgreen Co., a frugal, 60-year-old chain of drugstores, bought Houston's United Mercantile, Inc. and the Danburg Stores--ten stores in all, with yearly sales approaching $35 million. It plans to open several more United stores next year. Walgreen has been on the fringes of discounting for more than a decade, has 260 "high-volume" self-service drugstores, where prices are lower than in its 200 conventional stores.

>Most surprisingly, the Great Atlantic "& Pacific Tea Co., which recently discarded some of its conservatism by adopting trading stamps, said it would build a discount house next to an A. & P. store at Coraopolis, Pa. This will be a "limited"' discount store, marketing nothing bigger than customers can carry away. A. & P. insists that it has no immediate plans to open more stores, but a spokesman adds, "That doesn't mean we never will."

This file is automatically generated by a robot program, so reader's discretion is required.