York 5th Avenue store have been sluggish compared to the London rollout. Last month, our sales in London were signifcantly higher than those of New York. I think the high New York price (currently $262.50) is diminishing our sales and capping our profits in the market. I want you to evaluate if we should bring our New York mark-ups back in line with, or maybe even lower than, the London price (currently $225.00 after conversion). Those chaps in London know their business and they are using a good rule of thumb when they markup nine times our $25 marginal cost per box.
This is what I received from our sales teams in the two markets, and both inverse demand curves are quoted in dollar terms: London: PLD = 375—0.2QLD and then New York: PNY = 500—0.5QNY. I’d like you to take a look at these functions and give me a strategic review of our pricing strategy in the two markets. Again, I think we are leaving profits on the table in New York.