The 1980s was the decade many shoppers and merchants just said no to retail prices.
- Discount membership warehouses became almost a cult. They sold everything from furs to tires, with no floor help, little selection and prices often a whisker above wholesale.- Shoppers flocked to outlet malls for mass merchandised shirts and dinnerware, and to "factory" shops for designer clothing.
- Wal-Mart discount stores took over rural America and headed into more populous terrain.
- Prices below suggested retail became the standard on easily compared, brand-name merchandise like toys, led by Toys `R' Us, and consumer electronics, led nationally by Circuit City.
But reflecting the rest of society in the Reagan years, retailing was polarized. BMW cars and Rolex watches became household words and yuppie near-necessities.
The national success story at the opposite end of the marketing scale from Wal-Mart was the Nordstrom clothing and accessories chain. Nordstrom proved that customers were willing to pay full price for service.
The odd couple of Nordstrom and Wal-Mart both run on a mostly non-union, decentralized basis. The have well-trained store personnel who get training - and financial incentives - to treat customers like human beings, if not royalty.
Shoppers were also willing to trade low prices for convenience. The stunning growth of two-income and one-parent families left time at a premium, especially for women. Catalogs proliferated, and TV and personal-computer sales added to the shop-at-home craze.
The big supermarket chains have become 24-hour affairs and strip shopping centers made a big comeback, catering to people on the run. Some supermarkets became minimalls, incorporating an array of service departments with higher profit margins than ordinary groceries fetch.
The Gap Inc. demonstrated the merits of selling private-label, or store brand, goods that sold at a healthy profit margin even on sale. But other companies, notably Macy's, discovered that private-label clothing was no sure thing as it and other department stores seemed to be whiplashed by specialty and off-price stores. They got into an increasingly vicious cycle of cutting prices in order to move out seasonal merchandise and generate cash.
In acquiring I. Magnin and Bullock's stores from Federated Department Stores, Macy's piled additional debt on leveraged buyout borrowings. But giant Campeau Corp. got the bulk of Federated, including Bloomingdale's, and most of the bad fortune: At year's end, it was on the brink of Chapter 11, a nasty omen for the industry as it looks nervously into 1990.
The future of two of the nation's biggest retailers, K mart and Sears, also stood in question. Sears switched at great expense to "everyday low prices" on brand-name rather than private-label merchandise. But it seemed to serve mostly to confuse customers.
The crucial women's clothing business also was troubled the last several years of the decade. As the population aged, many women found fashions unflattering and overpriced, and they carried out a spontaneous boycott.