The festively decorated Galeria Kaufhof department store in this western German town is cutting prices on items from fleece sweaters to toy castles. At the Karstadt store across the street, the discounts range from cashmere sweaters to fondue sets.Not too long ago, these sales would have been against the law.In contrast to the U.S., where pre-Christmas price cuts play a key part in retailers’ strategies — and shoppers’ buying plans — holiday sales mark a small revolution in European retailing. For decades, European retailers could cut prices only during certain periods set by the government. The winter sales, usually in January, came too late for cash-strapped Christmas shoppers.In 2004, Germany’s retail laws changed to allow stores to hold sales when they please, but most retailers still kept prices high in the holiday season. Now, though, that last remnant of traditional retail regulation is cracking as well.
That from a Christmas Eve article in the the Wall Street Journal. The article also notes that Germany relaxed its restrictive store-closing laws last year, allowing states to decide the matter for themselves. I am not sure what the current state of legislation is here in Meck-Pomm–the only stores I saw open today were a Burger King and a McDonald’s, natch.
I had always assumed that Germany’s store-closing laws which, among other things, forbade stores from opening on Sundays, were enacted to reflect some cultural consensus about the fourth commandment–most businesses in the United States used to close on Sundays too, after all. But as I’ve heard Germans themselves say and as indeed the article itself points out, one of the main reasons Germans still support laws of this type is that they believe allowing stores to open anytime would benefit larger stores at the expense of small retailers who can’t afford to man a till 24/7:
But moves to change the rules for when and how people shop have come slowly and brought public soul-searching about life in a consumer society — as well as stiff resistance from trade unions, churches, and small retailers who say increased flexibility hurts store workers and benefits only large chains…
“Stores should not be open too long, so that the sales people can rest,” says Sophie Coumel, 33, who works for a Franco-German youth organization in Berlin and was buying a present at a Kaufhof store one recent evening.
Why Frau Coumel doesn’t believe workers are capable of deciding for themselves how much rest to get mystifies me. The same goes for the “trade unions, churches, and small retailers,” who apparently believe that the preferences of millions of German consumers should be subservient to their own. If workers don’t want to work longer hours, they won’t. If Germans don’t like shopping on Sunday, they’ll stay home. If customers like small retailers better, they’ll be fine. How can a piece of legislation possibly do better than to simply let each person make up his own mind about what’s best for himself?
What’s that Fig? Oh, that’s right–people are stupid. How stupid of me.
Of course, current arguments for an old law often don’t have anything to do with the original reasons for it. The WSJ article also mentions a German law enacted in 1933 that “prohibited haggling and put limits on bonus schemes such as store-loyalty cards.” The law lived on until 2001, supported because it was thought to protect consumers and small business. One of the reasons it was actually made into law, however, was because the Nazis found it a good way to “hurt the country’s department-store owners — many of them Jewish — who had been experimenting with creative sales strategies.” Historians generally agree that the Nazis were an unseemly lot, so I’m surprised the Germans didn’t question the law after the war, but, to be fair, the original effects of many laws are soon forgotten.
Take the Davis-Bacon Act of 1931, which was essentially the first federal minimum wage in the United States. While it is still on the books today and enjoys support across the political spectrum because of its ostensible protection for construction workers, the law was probably passed merely because it was a good way to price minorities out of the labor market, who were presumptuous enough to work for less money and depress wages for whites.
These laws, like so many others, were passed not to prevent exploitation but to prevent competition, which is the most surefire mechanism for protecting worker and consumer alike.
It probably would have allowed me to buy some cold medicine today, at any rate.
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