The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1916-03-05
O'Donnell Defends .Cut-Rate Plan
AS Means of Stimulating Trade
Local Druggist Explains However That He Respects Wishes
of Manufacturers Opposing Idea If They Deal in
=. Absolutely Square" Manner.

Ipronts with me- even II he is seemingly
a loser thereby? He does 1t to get vol
ume Of business and obtain quantity dis
counts that he could never take advan-
tage OF II his operations were restricted
to supplying small retailers.
Opinion About Jobbers.
by the way, what do you think
OF the future of the jobber?
" The jobber,' replied Mr. oDonnell,
may not entirely disappear, but in my
opinion there will be room henceforth
for only two classes of wholesalers-the
very large operators and the very small
jobbers. The former will get their bust
ness by supplying the big stores with
shorts, whereas the little Jobbers will
serve the small retailers, notably the
modest establishments of the Greeks and
other foreigners. 1t is my belief that
the big retailer Is wasting money II he
does business with the jobbers: he must
deal directly with the manufacturer IL
he would overcome his high overhead
But realize that the small retailer must
always deal through jobber. II he un-
dertakes to deal direct with the manu-
facturef there is the constant temptation
to overstock that will break him.
"Apropos his remark regarding the
operating expenses of the large retailer
Mr.. ODonnel was asked what It costs
him to do business. His reply was, be-
tween . and q per cent This Is based
on the showing for the year 1915 in Mr..
lO'Donnells main store, located at an i'm
portant street railway Junction-point on
the main shopping thoroughfare at the
national capital This store, which has
been established eleven years, did a bust
ness in 1915 amounting to 1896, 5I7, as COM
pared with sales in 1914 amounting to
sS76,0O0. At that Mr.. O'Donneu figures
that he has the best of the chain-store
operators because he claims that in MANY
chain drug stores the cost of doing bust
ness is IS to 40 per cent. Conversely he
argues that the corner druggist in the
residential district can never be driven
out Of business because the small drug
gist, doing business Of say $50 a
day, ought to be able to operate at an
expense of only 10 or Il per cent Speaking
Of chain stores, just little story Of what
happens when Greek meets Greek. A cou-
pie Of years ago Riker-Hegeman opened a
store about a block from the principal
O'Donnell store and started off by slash
ing prices on articles that had been used
as leaders at the rival establishment.
Quietly. Mr.. O'Donnell went to the Riker-
Hegeman manager and said, If you start
price-cutting campaign, will not
merely meet it, I'll beat it'-and they
have lived happily ever since.
Putting on Evil Day.
Getting back, in his discussion for
Printers Ink, to the subject of the Job
bers, Mr.. O'Donnel touched upon the
propensity OF many jobbers to seek sal
walton in private brands. They are
merely putting of the evil day. was the
druggists comment, because the average
jobber will not take a private brand seri-
ously enough to protect it the way
bona-ide manufacturer win.' Pursuit of
this subject brought out the fact that
ODonnell, for all that he has rather ex-
ceptonal opportunities, shows no dispo-
sttion to plunge on private brands. He
has two or three-one Of which he claims
pays him $4,000 a year-but he shows no
disposition to increase the number. Plain
ly the nationally advertised article is
meat and drink to him and he uses the
private brand only as q club for the OBJ
durate manufacturer as, for example,
when there was a falling out over terms
on Wyeth's Sage and Sulphur and
O'Donnell put in his own Sage Sage
This brings US, in natural sequence, to
the attitude Of this well-known price
cutter with respect to advertised ana
prtce-hxed goods. Ten minutes CONVEX
satton with O'Donnell will, 1 think, dem
onstrate that this druggist Is by no
means to be classed as an unthinking,
initiative cut-rate artist. Price-cutting is
fixed and studied business policy to
which he has adhered ever since he
opened his first store. One vital point is
overlooked by many OF O'Donnelrs crit
ics-his price-cutting is not confined, as
in the case OF many another merchant
merely to leaders, but extends to staples
and unbranded articles as well. His ad-
vert1sing slogan, in use for nearly a
dozen years, is No matter what you pay,
O'Donnen will sell It for less Doesn't
that get you into trouble the interview
er asked, with customers when a COM
petltor meets your cut prices" oh, no.
was the reJoinder, we always stand
ready to knock of a cent or two under
such circumstances in order to make
good our motto. And time and again
clerk has come to me and said, for in
stance, Did we advertise Kinds Honey
and Almond Cream today at % cents?'
but whether we did or not I always tell
the clerk to let them have It at the cut
price mentioned If we have ever quoted
that price
Views on Price Cutting.
Frankly, Mr.. O'Donnell, how do you
regard price-cutting in its effect upon the
manufacturer and his nationally adver-
tised goods?
1t is both good and bad. 1t is good
in that it unquestionably stimulates de-
mand. 1t is bad in that it encourages
substitution. However, believe that
the substitution evil is on the wane in
drug stores. You notice that efforts at
substitution have been abandoned in
many chain stores where it was once the
regular practice. have never tolerated
it in any of my stores. When a customer
asks for an article by name we unhesi-
tatingly hand out that article, or, If we
do not have it in stock, we tell him so
and make no effort to induce him to take
something equally as good
I know. too, that itsis the claim of
some supporters of the Stevens bill that
the cut-rate merchant makes up for his
narrow profits on trade-marked articles
by selling inferior staples or unbranded