Well Christmas has come and gone and now its sale time.
Awhile ago we posted a blog regarding the absurdity of predatory pricing. While the content of the blog was 100% accurate, the blog itself was very much tongue in cheek. After all how stupid would a regulator need to be to go down that road … surely no one would … not given the ready availability of so much good economics.
Well they have, and as anticipated the outcome is nothing short of absolute lunacy.
Where did they do it? Where else, but that bastion of anti capitalism, social democracy and good cheese. France!
Sales in France are governed by specific legislation. Laws supposedly designed to stop unfair competition and protect small shopkeepers from those "all year" sales by large stores who can afford to sell some items at a loss. In France out of the sales period, it is an offence to knowingly sell goods at a loss, again a measure designed to protect small shopkeepers from large retail groups
Trading laws stipulate that there are two periods for sales in France. Winter sales from January to February and summer sales from June to July. In each case, the sales last for five weeks. All goods on sale must have been in the shop for a minimum of thirty days prior to the sale date. No buying in cheap stock and selling it as a sale item. Reductions’ must be visibly displayed in percentage terms. labels must also show the old pre sale price and the new sale price. Retailers are allowed to reduce their prices three times in the sales - after the first fortnight, and again in the final week.
Outside the official sale periods, retailers are allowed two weeks in the year, to use at their discretion, for extra sales such as pre-Christmas sales or spring sales. Shops are allowed to run "special offers" on certain items of stock throughout the year i.e. - a rack of cheap "end of line" clothing. Shops that are closing down, or refitting are allowed to hold sales - "everything must go" with written permission from local authorities.
Yesterday morning many shops (with permission from their local trading authorities) were open at 7am. Needless to say that the starting date is a national one decreed by the government. (thanks to fabfrog.com for these nuggets of info).
It never ceases to amaze me how blatant anti competition laws are often dressed up as pro competition rather than what they truly are …. Articles for Government sponsored cartel governance arrangements.
Aside from mad Frenchmen, its also worth noting that the American fiscal stimulus bail out framework has just started to produce some dodgy results