Minimum Price Battle Hits Supreme Court

Minimum Price Battle Hits Supreme Court

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Suppose the ineffectual manufacturer’s suggested retail price were suddenly reinvented, with teeth, as a minimum set price? It could happen, and soon.

All retailers would do well to monitor decisions coming out of the U.S. Supreme Court through early summer. A ruling is expected in Leegin Creative Leather Products v. PSKS Inc. a case argued before the court in late March, which could profoundly reshape the retail landscape, or reaffirm the status quo.

Potentially at stake is a retail concept which anyone who has grown up in the last century takes for granted: manufacturers cannot set the minimum price at which their goods must be sold in stores. It’s a fixture in the consumer’s mindset, fundamental principle for today’s aggressive brand of deep discount, mass market anything-for-less retailing. Free to sell products at any price, some promote hot products as loss leaders to entice customers into stores with hope they will also buy something a little more profitable.

But for the little guys and independents who can’t get goods on the same terms as volume resellers, success is often won in by how effectively they compete where the big guys can’t, on the selection, service and expertise that defines specialty retailing.

If the ruling comes down in favor of Leegin, retailers should be ready to act: We recently spoke with former imaging retailer Bill McCurry now of McCurry Associates, who told us, “If they overturn the court’s earlier ruling, and allow minimum set pricing, and I was a store buyer, I’d be on the phone with manufactures the next day asking them, ‘ What are you going to do about it, and what are you going to do for me now?’ ”

A decision in Leegin Creative Leather Products v. PSKS is expected by summer, and Picture Business will explore its implications, however the U.S. Supreme Court rules, later this year.

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