In 1936 the U.S. Congress passed the Anti-Price Discrimination Act (more commonly referred to as the Robinson-Patman Act). The intent was to prevent unfair price discrimination by requiring that sellers of products offer the same price terms to customers at a given level of trade.  Under the Act, it is illegal for the manufacturer of a product to sell to one retailer for a different price than that retailers similarly sized competitor. Volume discount is one form of price discrimination that is allowed under the law. In fact, as far as I can ascertain, it is the only form of price discrimination allowed by the law – even though one could imagine other reasons a product manufacturer might desire to give a smaller retailer preferable pricing (better store position, positive brand associations, other?). When a retailer qualifies for the lowest (or among the lowest) price from the manufacturer, based on their volume, they can take those discounts and pass them along in the form of a lower price to their customer.  (Note: These “volume discounts” are more commonly referred to as a retailer’s “trade budget” from a given manufacturer and are also often applied to co-marketing and other mutually beneficial applications…but for the point I’m trying to make here, I’m going to continue to refer to this money as a discount to the product price). When a retailer is big enough to be the leading volume seller across many categories, and by a pretty significant margin, as Walmart has been for some time – we call their strategy for winning over price conscious consumers an Every Day Low Pricing Strategy (EDLP). Because of Walmart’s size, it has proven to be a sustainable competitive advantage – made possible primarily thanks to Robinson-Patman. For the price-sensitive consumer, it is hard to beat an EDLP strategy – but combined with other positive attributes, such as a more pleasant shopping experience, supermarkets have had success over the years with the following alternatives: Hi-Lo– Retailer places some high interest items on deep discount and promotes them, enough to draw the consumer into the store, then makes up revenue and profit margin on the other items consumers may pick up in the same trip. All retailers do this to varying degrees, some better than others. BOGO – A form of “Hi-Lo”, BOGO stands for “Buy One Get One Free” and it has been around for a long time. Consumers love it, partially because it involves the word “FREE” (always gets people’s attention) – but also because the consumer value proposition of a BOGO strategy involves low work and high reward…almost as good as EDLP (no couponing, no special cards, few conditions to meet). BOGO as...