#030 / 2000


Discount damage

"I never pay the sticker price" is the boast of a growing number of retail furniture customers in BC. This challenge to the way retailers have traditionally sold their products may be having a negative effect on the BC retail furniture sector.

BC Stats figures over the past five years show a modest overall increase for industrial employment (including a rebound in employment in the furniture manufacturing sector). The almost 30 per cent drop in employment in the BC retail furniture sector over the same period contrasts sharply with these positive numbers.

To find out why this is occurring, furniturelink contacted Alan Wilson, Chair of the Retail Merchants Association of British Columbia (and owner of Vancouver's Industrial Revolution, a modern furniture store). Wilson pointed to "lower margins" in the sector because of increased competition in a sluggish market and the increasing practice of discounting from the sticker price.

Many Vancouver-area furniture retailers use such phrases as the "suggested retail price" or the "pay later price" instead of "regular price" on their price tags. This may be occurring because, as stated in the British Columbia Trade Practice Act, the regular price means . . . a stable price that has been maintained over a reasonable period (e.g., two months or more) during which a reasonable volume of goods or services have been sold . . . continuous promotions referring to previous "regular" prices are deceptive since after a time the new price has become a regular price. Such offers should not continue for more than 30 to 60 days.

Retailers often discount "sale" or "pay now" prices with the result that the discounting culture has become so ingrained that furniturelink witnessed one retailer presenting a customer with a "free" set of glassware after the purchase was made because the customer had not haggled for a further reduction of the advertised "discount" price.

Although it may appear that this discounting practice is good for the consumer, in the long run it means retailers are not getting a sufficient return to keep staff and provide adequate service to the consumer. We may want to consider returning to the practice where the "regular" price is adhered to across the sector except for two specific "sale" periods each year when discounts are genuine - as is still the case in some European countries where furniture retail is flourishing.

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