Minsk residents rushed to shops on a discount day.
The country's prime minister Miasnikovich ordered last week to organise the national discount day on December 29 ahead of the New Year. The government ordered state-owned retailers to offer discounts of from 15 to 20% “at the cost of coordinated reducing prices of non-food items by manufacturers and cutting markups by retailers”. Correspondents of onliner.by went to the capital's department stores to see what people buy.
Specialists say the practice of holding discount days was successful attracting customers to stores. The Ministry of Trade says it increased sales of Minsk's department stores 3- or 4-fold
It looks true. At 11:00, an hour after opening, the Central Department Store (TSUM) was filled with shoppers. People were buying washing machines, gas stoves and refrigerators. Most of customers were pensioners and older people, but young people were also noticed.
“I want to buy a present for my boyfriend. An MP3 player or earphones, I've not decided yet,” a BSU student Aliona said. “The discount is small, but it's good they offer it. It's silly to go to Vilnius or Bialystok to buy such a small thing, though my friends went there.”
A queue of 20 people stands in the carpet department.
“Mom, do we really need a carpet? To hell with this 15% discount.”
“Look, it's warm and cheap. Let's buy it,” the mother tries to persuade her daughter.
Elderly women buy buttons and threads.
“I am a pensioner. Unlike you, young people, I count every ruble,” says a woman who wants to buy curtains. “I am grateful to Ladutska [Minsk's mayor] for offering discounts.”
The shopping centre “Na Nemige” offered a 15% discount even on food, but it doesn't apply to all food items.
“Why is there no discounts on sausages?” two women ask with indignation in the meat department.
“Read the rules,” the shop assistant explains. “It's meat!”
So, meat is priceless and cannot be included in the discount programme unlike alcohol, coffee, kvass, potato chips and other food products.
“Champagne is 6 thousand cheaper here,” a young man shouts on his mobile phone. “How many bottles should I buy? Ten? Okay.”
The home appliances department doesn't have many people. An elderly couple is choosing a TV set and asks a shop assistant why a Belarus-manufactured Horizont TV is better than Samsung. It would be interesting to hear the answer, but the assistant speaks too quiet.
A loud crowd gathered in the neighbouring department to buy cooking pots and pans.
GUM department store announced discounts of 15%, but only on some products. Fridges are sold with only a 10% discount. However, many of them are marked as sold.
“I received a bonus for the New Year. My wife and me wanted to buy dollars, but then decided to buy a new fridge,” a customer says.
Belarusian retailers seem to understand by the end of 2013 that discounts are an effective tool to attract customers. But why do they cut prices by 10-15% instead of 50-70% like in Poland or Lithuania? Most heads of state-owned stores answer: “We will suffer losses.”
“You cannot sell cheaper than you bought. It's an axiom,” Mikalai Miatlitski, the director of the department store “Belarus”, gave a more detailed answer. “There is a marketing trick. Retailers add high markups, for instance 100%, to popular goods. You sell goods with a high markup and you can afford to reduce the price to the level lower than the wholesale cost during the sale. Our stores are moving in this direction step by step, but we don't have 100% markups. We prefer to cooperate with manufacturers more closely. How do shops form prices? It's the manufacturer's price plus the retail markup. The markup covers the shop's expenses on building maintenance, rent, utilities, electricity, wages, transportation and so on. The average markup is about 22% and the average expense is 21%. The difference is our profit. We reduce markups and loss our profit to please customers.”