“Grey Thursday” and the economics of opening hours

Last updated on: November 28, 2013 at 10:42 pm by Jane the Actuary

“Grey Thursday” and the economics of opening hours 2013-11-28T22:42:00-06:00 Jane the Actuary

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So I’m visiting with the parents, dinner, football, and Pumkin Chunkin are over, and the house is quiet. Time to write about the article in the local Detroit News, on so-called “Grey Thursday”: “Black-and-blue retailers bet on ‘Gray Thursday’.”

Here’s the key quote:

If you want to know why malls and big-box retailers are opening as early as 6 a.m. on Thanksgiving, the answer is the same you’ll hear from the throng of shoppers surging through the doors for those blockbuster holiday deals: fear of missing out.

Retailers know that opening earlier won’t prompt shoppers to spend more money, but they don’t care — just as long as those shoppers don’t go somewhere else.

. . .

“It’s brutal,” says Ken Dalto, a management consultant based in Bingham Farms. “The stores are just going to keep trying to out-compete each other.”

Does the addition of Thanksgiving as a bargain-hunting day really provide any value for anyone? Retailers have to open another day — and pay employees accordingly (perhaps they can reduce their staffing the day after to compensate, but they can’t really predict shopping patterns, and in any case, Thanksgiving would require holiday pay). Shoppers are unlikely to get more bargains than before. And, of course, it damages the quality-of-life of those retail employees obliged to work. About the only people it benefits are those who don’t celebrate Thanksgiving as a family holiday, who are bored after enforced family time or alone-time if they’re without family, or appreciate the extra pay.

Which brings me to car-shopping hours, and a post in the Chicago Tribune columnist, Eric Zorn’s blog, about a state senator proposing the repeal of Sunday car-shopping bans. The arguments in favor of the repeal: it’s special treatment of the car industry, to allow dealers, in a cartel-like manner, to agree on limits on opening hours, and it’s a hardship on families to be limited to only one weekend day for their car shopping. The arguments against: car salesmen work particularly long hours and, if this bill were passed, would be obliged to work even longer hours. The bigger question: would the longer opening hours increase auto sales and benefit the economy? I suppose the question is how many people are in fact deterred from car-shopping and hold onto their cars longer than they otherwise would due to the inconvenience of car-buying.

Which brings me to a, ahem, heated discussion I had with my mother-in-law during our stay in Germany. In our part of the country, grocery stores were open 8 am to 8 pm, 6 days a week. By law, they couldn’t stay open later, or open on Sunday. (And this, mind you, was an improvement on the prior law restricting stores to 6 pm except for a biweekly “longer Thursday” of 8 pm.) The only exceptions were gas stations and the convenience stores associated with them (which meant that I once found myself, on a Sunday morning, hunting around for a gas station that sold something that could credibly qualify as a toy for an afternoon birthday party — ended up with a set of toy cars!).

Then the World Cup came to town and, temporarily, stores were allowed to stay open late, and even open on Sunday, in cities where a World Cup game was being played on Sunday. What bliss to be able to go shopping after the kids were in bed! And after the World Cup ended, legislation permitted each state to determine their own opening hours: in Bavaria, nothing much changed but in Berlin, you can buy your groceries as late as midnight, depending on the store. Stores still can’t open on Sunday — that restriction is built into the constitution.

And the discussion with my mother-in-law was that I was all for extended opening hours, as an aid to working parents, and she saw them as disruptive of family life because, of course, someone would have to be at the cash register at those extended hours. Of course, the traditional German household does have a stay-at-home mother (which is part of why the birth rate is so low — it’s rather difficult to run a household with children and two working parents, and increasing numbers of couples are solving that problem by not having children).

I tried to google this to see if I could find anything that indicated whether there’s an economic benefit to extended opening hours. Presumably there’s a tipping point — limit the legally-permitted opening hours and it’s too disruptive to ordinary Germans trying to do their daily shopping, and impacts quality of life; extend them too widely and stores, needing to compete, see profits decline by the need to staff their stores for longer times without a proportionate increase in sales.

Anyway, I’m not an economist — but it would be interesting to know if any modelling has been done on this. And, of course, I’m completely going against mainstream America when I think that buying endless quantities of things, especially ephermeral things like clothes and shoes, doesn’t substantially improve one’s quality of life.

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