Business your connection to The Boston Globe

Need a sofa? Don't expect an employee discount

NEW YORK -- Consumers can buy most current car models from the top three US automakers at employee discount rates, but they shouldn't expect the same deal for power boats, furniture, or other big-ticket items.

Companies that sell such items already offer deep discounts and gimmicks like zero percent financing, and they don't believe they need to mimic the auto industry's tactics, analysts say.

In recent years, department stores and apparel chains have offered employee discount rates in what are called ''friends and family" programs -- but to select customers, not the general public.

Scott B. Krugman, spokesman for the National Retail Federation, noted that ''retailers are already aggressive when it comes to discounting."

What's different about Detroit's discounting is that it grows out of automakers' need to pump up sluggish sales.

''The auto industry has their back against the wall," said Richard Hastings, a retail analyst for the credit-ratings firm Bernard Sands.

The Big Three, hurt by slowing sport utility vehicle sales and aging product lines, have been luring shoppers with various promotions.

General Motors Corp. started the employee discount promotion last month, and Ford Motor Co. and DaimlerChrysler AG's Chrysler Group started similar pricing schemes when they saw the success GM was having. GM's sales soared 41 percent last month to the highest total in almost 19 years due to the program, which allowed customers to buy 2005 vehicles for thousands of dollars less.

Bill Cody, managing director of the Baker Retailing Initiative at the University of Pennsylvania, said the auto industry ''doesn't have a great parallel with the retailing industry."

For one thing, automakers dictate what should be sold at dealers' lots, while in other retail settings, it's the merchants who have the power over suppliers, Cody said. Another factor: Auto models come out once a year, but furniture, refrigerators, and TV sets are shipped at various times in a year. That puts less pressure on retailers to get rid of inventory at a particular time.

Paul Capelli, a spokesman at Staples Inc., said the office supply chain doesn't plan to take discount cues from the automakers, because it guarantees low prices year-round.

Today (free)
Yesterday (free)
Past 30 days
Last 12 months
 Advanced search / Historic Archives