Magazine | March 25, 2013, Issue

Retail Politics

American dry-goods retailing is a miserable business. Imagine this: You’re the new head of a vast retailing empire — say, J. B. Dimey’s. Sales are soft; competitors nip at every bloodied flank. The Internet thing isn’t working — sure, 46,036 people liked you on Facebook, but this didn’t translate to $1.6 billion in sales like the consultant said. The mall, your postwar redoubt since downtowns withered when the suburbs rose, is starting to feel like a set from the next season of The Walking Dead.

Then there’s the matter of your retail policy: sales. Lots of sales.

The pre-Thanksgiving sale discounts your prices 4 percent off the standard 20 percent year-round markdown, but the Black Friday sale discounts prices 7 percent off the seasonal 24 percent markdown, adjusted for inflation. Sales continue through December, with merchandise marched off to the Clearance rack, where the price is 35 percent off the adjusted standard 20 percent markdown, unless it’s an ugly pair of plaid shorts, in which case the Manual Adjusted Dress Retail Accounting System (MADRAS) calls for the item to be increased 3 percent above the usual discount — if the customer has a coupon and has a charge card AND agrees to take an online survey for the chance to win a visit from someone who comes to your house, takes the shorts, and burns them, because they’re plaid shorts, for heaven’s sake.

After Christmas all the miserable unsold garbage, including the pants with ten zippers — hey, they were big in Japan for a month in 2009 — will be marked down 31 percent from the pre-Thanksgiving price, except for sheets and towels, which are marked down during the Presidents’ Day clearance, when mittens are actually increased 2 percent to compensate for the loss-leader markdowns in the Tires and Galoshes department.

But hey, people think: Ten percent off! That’s a good deal.

Imagine you’re the boss of all that, and you’re the sort of person who lines up the pencils on the desk in nice straight rows when you’re on the phone. You’d go mad.

That was the problem with Penney’s. They brought in a guy from Apple’s retail arm, where there are no sales, one price, clean stores. The new guy axed the sales, instituted basic prices without gimmicks, and vowed to make the stores cleaner and more appealing.

Sales dropped 30 percent.

That’s bad news for conservatives.

Why? Because we’re nostalgic mopes who remember trips to Penney’s with Mom? Not really, especially if that trip included a mortifying purchase of your first athletic supporter. It has to do with the way people calculate value.

#page#I went to the local Penney’s the other day. Previously, the tie department gave you 50 percent off a third tie if you bought two from the regular-price rack, unless it was Afternoon Neckwear Madness or something, in which case all ties were 20 percent off if you bought four. Most of their ties I wouldn’t buy unless I had lost a limb at the elbow and needed to tie off to stop the bleeding. But now they had different prices for ties, according to style and quality. Awl-in-the-eye-ugly ties that felt like you were folding a strip of tin around your neck were cheap; ties that wouldn’t be out of place on a mobster in a coffin cost more, and didn’t scratch your hand when you touched them.

Found a tie, told the clerk that I liked the store’s clean look and the new pricing system. He sighed and looked past me, scanning the rest of the store. I followed his gaze. There was no one in the store.

“I’m glad someone does,” he said.

People love sales, you see. People believe there is a fixed value for a shirt, filed away at the Bureau of Weights and Measures, and only a fool walks in and buys between sales.

These are not people who will respond well to a flat-rate tax.

These are people who believe a decrease in the rate of increase of a federal program is a cut.

This is what conservatives are up against: We want a Penney’s-style chief executive to simplify things, streamline the brand, close underperforming stores — in this case, that would be government departments, cities, counties, or perhaps entire states that just aren’t working out anymore. Of course, you can’t say “Detroit! Lost our lease, everything must go!” because it did already.

We want a president who’ll weed out the federal employees who are the equivalent of the slow, silent clerk who folds pants in the Dockers department for ten minutes while you wait at the counter to buy socks, and who does not care if you walk away fuming.

Frankly, it would be fine if you did. But Democrats would block the firing, unionize her under the Amalgamated Pants Rearrangement Guild, and require that you purchase two pairs of socks before she has to walk all-l-l the way over there.

We want a simplified tax code that fits on a restaurant placemat, understood by all, stripped of gimmicks, a pellucid statement of equality under the law.

But no. It’s better to have a government that takes 50 percent from the 1 percent and 43 percent from the 5 percent and gives 43 percent of that to the 20 percent and spends 75 percent on 35 percent of the debt which is 100 percent of the GDP, because 47 percent of the customer base will give you 51 percent of the votes to take 4 percent more away from the 10 percent of the people you don’t like because they don’t shop at Penney’s.

Of course these people vote Democrat. Ten percent off the 90 percent they’ll pay when the bills come due? That’s a good deal.

– Mr. Lileks blogs at www.lileks.com.

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