YORK, Pa. -- Many of Associated Wholesalers' independent retailers have cut their photo-processing retails nearly 30% in an effort to become more competitive with mass merchandisers. There are 111 AWI-supplied retailers who implemented the new pricing structure last month. Retails will vary slightly among the five- and six-unit operators with stores in Pennsylvania, Virginia, Maryland and New York.
Processing fees on average, however, have been reduced from $5.76 for a roll of 24 double prints to $4.08, a $1.68 reduction. Customers are charged $2.88 for a 24-exposure roll, and then pay an additional five cents a print for a second set. "We're getting hotter in photo processing and using more specials to bring this business to the supermarket," said Charles Yahn, AWI's vice president of general merchandise. AWI supplies about 900 retailers with nonfood. Retailers with the more competitive retails have reduced their everyday margins from 33% to 22% in hopes of boosting sales volume by 30%.
In the fourth quarter, AWI retailers are expected to drop prices even lower to $1.99 for a 24-exposure roll, said Yahn. This is a promotional price under which retailers will operate with 8% margins. Yahn expects another 150 AWI retailers to switch to the new pricing by early next year.
The main goal of the campaign is to bring pricing closer to Wal-Mart, Kmart and the discount drug chains, said Yahn. Some Wal-Mart locations charge as low as $2.46 for processing a 24-exposure roll, he mentioned.