How did I end up Here?
In Boston, I liked to dress for maximum comfort and the least amount of prep time possible. You could catch me outside in leggings, beat up sneakers, a wool sweater, makeup-free, with an old leather backpack I found at Goodwill. To be fair I biked to my internship and school so I have a bit of an excuse for my fashion faux pas. After a few days in Paris, I realized that people were looking at me for all the wrong reasons. My laid back style was not going to cut it. The next day I went to Zara’s and Nike to pick up some new clothes and kicks, respectively. In all the shop windows there were these big signs which read “SOLDES” which means “sales” in French. The signs were everywhere and indicating large markdowns of 50% off. I did not think anything of it since in America stores advertise sales all the time. I was just happy to pay half price for my new (and badly needed) clothes.
It was a little strange how many big red SOLDES signs there were and then the chaos in the stores! There was a sense of urgency inside the stores; customers were in a frenzy to get the dress or the shoes they wanted before others did and there were long lines for the fitting rooms. It reminded me of the crazy Black Friday stores and shoppers. Later that night I started googling and learning more about les Soldes.
What is les Soldes?
Unlike in the United States, in France, the government regulates sales for all merchants ranging from department stores, boutiques, designer outlets, and even hardware shops. The French Government sets 5 week biannual periods for sales and then gives merchants two floating weeks that they can use any time of the year.
Les Soldes occurs once in the winter (January 10, 2018 – February 20, 2018) and then again in the summer (June 27, 2018 – August 7, 2018). These are the times when there are big sales and stores work fo clear out last season’s inventory.
Sill there are many regulations by the government imposed on the merchants during les Soldes.
For example:
- If there is a sale then the word soldes must be present
- The original price must be marked along with the sales price
- The merchandise on sale must be bought by the store and on sale for at least one month before les sales
- Warranty policies must be made clear to the consumers and warranties are still valid (if there is a defect with the item the consumer can bring it back)
- Not all products in a store can be on sale
Where Did les Soldes Originate?
As told by Sight Seeker’s Delight, les Soldes originated in the nineteenth century with the advent of ready to wear clothes and department stores. With the new invention of mass production of clothes and department stores, the French did not have to go to the tailor for their clothes, but instead the department store. Similar to department stores of today, the first department stores were at a loss for what to do with clothes at the end of the season. The older, out of season inventory had to be removed from the showroom to make room for new inventory.
Simon Mannoury (the founder of one of the first department stores, “Le Petit Saint Tomans”) was one of the nineteenth-century store owners in a bind. In 1830, he decided to have an event where the goal was to get rid of the rest of the unsold wears by cutting the cost of the clothes. He thought that selling the clothes at a reduced price was better than throwing them away (e.g. the department stores suffers less of a loss of capital). The people of Paris loved this event and Simon Mannory had room for the new inventory. Thus the concept of solde was born. The idea caught on and other department stores started to hold their own soldes.
In 1906 the French Government stepped into providing a formal definition of a “solde” (an occasional price reduction on dated goods).
In 1996 the government provided more clarity on when les Soldes could take places; les Soldes were held for 6 week periods twice a year.
In the twenty-first century, technological advances and online shopping means that stores do not have the same amount of excess merchandise as in the past, thus there is less need for les Soldes. In 2008, the French Senate changed the rules around les Soldes. Now les Soldes are five weeks long, the whole of France (with a few exceptions) synchronize les Solde, and stores are allotted two weeks for “les soldes flottants” or floating sales which can be used any time of the year as long as they are far enough away from les Soldes. Given a great deal of paperwork which needs to be filed with the government to have les soldes flottants, many retailers follow the schedule of les Soldes.
Why does the French Government Regulate Sales?
You may be asking (as I was) why the French government regulates sales in the first place. I agree that is sound like a very strange practice in a country with a free market.
The OECD explains that the French Government struggles in limbo between competition and monopoly, which is causing ineffectiveness in the system. As a result, France does not have coherent and effective competition policy and instead opts for weaker government regulations surrounding discrimination, unfair competition, and pricing. Les Solde is an example where regulation contradicts competition policy. For example, laws regulating sales are intended to promote competition but are often interpreted in anti-competitive ways. The very broad category of regulations that restrict competition are more than is necessary to achieve the regulatory goals. Without sales and the allowance of natural price fluctuation, there is less room for vertical market agreement. Thus, goods are kept at an artificially high level; this extra high cost is shouldered onto the consumer — in real-world terms, the consumer (you and I) have to pay higher prices for goods than necessary because of the “fair competition” regulations.
Here is an example of the effect about which the OECD is talking: If there was a book and the government said that the book must be sold at a constant price (say it costs the consumer 15 € and it costs 13 €) throughout the country, the goal of this regulation is to create horizontal agreement, less competition, and so a more fair market for the consumer (it does not matter if I buy this book in Paris or Nice, I will pay 15 € for the book). However, this stopped vertical market agreement; if it now costs less to make the book 10 € to make the book and the merchant is willing to sell the book for say 12 €, the merchant is not allowed to do so because of the regulations. The uncommunicative high price for the book will mean that fewer people can buy it and there will be less reading.
For this reason, the OECD recommends a change in France’s price controls to allow more competition and clearer, more effective policy. Thus, putting an End to les Solde
