Business: Bargain Time

Wherever the U.S. economy is going, one thing is plain: not in many months has there been a better chance for the consumer to pick up bargains.

Out from the Chicago headquarters of Montgomery Ward last week began to flow 5,500,000 Christmas catalogues that tantalized customers—and irked competitors. Prices have been cut an average 7.8% below those in the last catalogue. Portable typewriters have been slashed from $119.50 to $107.75, electric shavers from $20.57 to $17.95, some bicycles from $32.95 to $29.88. Bigger cuts have been made in toys. Said an excited executive of competing Sears, Roebuck, which immediately rushed out a lower-priced supplement to its Yule catalogue: “They’re giving the business away.”

While price cutting in 1960 has been confined largely to the overstocked appliance industry, it is spreading. Eagle-eyed shoppers can find bargains in medium-and lower-priced furniture lines, housewares, drugs, cosmetics, cameras and sporting goods. Many stores are doing their cutting in special sales, e.g., Manhattan’s Macy’s last week was selling automatic dishwashers at prices well below even those of the discount houses.

Buyers’ Market. The shrewd bargainer can get good discounts on 1960 autos if he finds a dealer with a hefty backlog. Cuts on 1961 “models are harder to find. They are selling too well. Goodyear is slicing its winter tire prices from 10% to more than 15% on popular sizes. American Motors was the only U.S. automaker to raise its 1961-model prices—by $10 to $60—and the Frigidaire division of General Motors announced last week that it is “holding the price line” on 1961-model appliances. Even Robert Burns took big ads to boast price cuts in its Panatela cigars from two for 27¢ to two for 25¢.

Prices of newer homes, which have traditionally increased yearly, are merely standing still. “It’s definitely a buyers’ market,” said Frederick Hastings, president of Chicago’s Homefinders Inc. “There have been more houses on sale than at any time in the last five or six years. Tight money had a great deal to do with it. So did the slowing state of economic activity.”

One of the unusual features of the new competition is that merchants who are stressing quality instead of price say they are doing well. Manufacturers and distributors of hardware, meeting in Manhattan last week, reported that U.S. consumers are spending more freely for many higher-priced items for home, lawn and garden, passing up cheaper articles.

Despite the price trimming, most businessmen, already caught in the profit squeeze, do not see any general across-the-board price cutting ahead. They think consumers may be waiting for this. But when it does not come, retailers think that consumers will step up their buying.