End of a Retailing Era

For almost a century, normally under-control Germans entered a two-week phase of shopping madness two times a year. The last Monday in July and the last Monday in January marked the summer and winter closeout sales, where a variety of goods, notably clothing, sporting equipment and household items, can be had at savings of 50 percent or more.

Next week’s summer clearance sale, however, could be the last and bring this tradition of semiannual shop-till-you-drop fever to a close. A new law that is likely to go into effect in January 2004 will allow retailers to have clearance sales whenever they want.

Up to now, stores were only allowed the two 14-day clearance sales which were marked by near anarchy as consumers set their alarms early and lined up outside stores in the early morning to be the first in the door to rummage through the piles full of marked-down socks, shirts, skirts and ties.

Into the 1970s, the closeout sales played a significant role in German society, according to Andreas Kaapke of the Cologne Institute for Trade Research. For consumers, the sales were a kind of day trip for the family; for stores there were a chance to clear their aisles of old merchandise. Price-conscious parents took a day off work and brought their children to the stores twice a year to buy their complete wardrobes for the next six months.

But times changed. Fashion designers no longer brought out collections just in the summer and winter and traveling abroad replaced traveling to the local department store.

“We want to keep our closeouts!”

Some groups are opposing the law liberalization, saying it’s to the advantage of large retailers and will confuse shoppers. Since 2001 when law restricting rebates and bargaining were loosened, the retail branch has been involved in a sales war to attract German consumers who are increasingly unwilling to spend. The result has been that customers know with less certainty than they used to if they have actually gotten a bargain or not.

“Price transparency will suffer with the end of the closeout sales,” said Reiner Münker, manager at the Center for Competition in Bad Homburg.

Others seem to regret the end of the sales era on a more emotional level.

“The closeout sale was like a lighthouse that signaled: Now the prices are really going down!” said Heinz Waldmüller, author of several books on bargain hunting. He relished the two-week limited nature of things. “Like at the opera, you need an overture and a good ending.”

Germany’s main consumer protection organization, however, and many retailers welcome the change, which they consider overdue. “Customers are responsible and old enough [to handle the change],” said Thomas Körner, manager at the Karstadt chain of department stores. One of his colleagues, however, was not so quick to dismiss almost a century of tradition.

“No matter what happens,” he said, “the closeout sales are going to stay in the minds of our customers.”