The price cuts are dramatic, like forty per cent off breakfast cereals, the same off bars of soap, fifty per cent off soft drinks, and so on.
Indeed, many items are sold at below *the* cost to Williams.
Yes, "the" is not needed here and it makes the sentence sound awkward.
Below cost is a retail term usually associated with online vendors. Since these companies have lower overhead (expenditures, etc.) and private equity funding, they can often sell products at "below cost". Meaning that in the short term they aren't making any profits, as their sale price is lower than the cost to make the actual product
In this case, Williams is acting as a third-party vendor which is benefiting from "below cost products".
Hope that helps :)