Path: utzoo!utgpu!jarvis.csri.toronto.edu!csri.toronto.edu!mart
Newsgroups: ont.general
From: mart@csri.toronto.edu (Mart Molle)
Subject: Re: Sunday shopping
Message-ID: <1989Dec29.181919.18945@jarvis.csri.toronto.edu>
Organization: University of Toronto, CSRI
References: <1989Dec29.113120.6892@me.toronto.edu> <1989Dec29.123430.15786@jarvis.csri.toronto.edu> <1989Dec29.171844.13290@me.toronto.edu>
Date: 29 Dec 89 23:19:19 GMT
Lines: 52

In article <1989Dec29.171844.13290@me.toronto.edu> zougas@me.utoronto.ca (Tom Zougas) writes:
>
>I was considering the scenario where _all_ locations were forcing Sunday
>opening. This is a possible long-term case.

It is an unlikely scenario, unless there is legislation *forcing* stores to
open on Sundays.  I've lived in the California where Sunday shopping is common,
and it is far from universal.  Many but not all department stores are open
on Sundays, for example.  And, in particular, some merchants make a point
of *not* being open a lot-- there's an outfit called "Four Day Tire Stores"
that makes it a feature that they are only open 40 hours per week to save you
money (just one shift, no overtime...); I think their "40 most efficient hours"
are 8-4 Wed -> Sat.

As for *all* locations forcing Sunday opening: (1) you could rent a store
front on Bloor and keep whatever hours you like, (2) you could put your store
in a Bay Street bank tower, where you too can keep bankers hours, and (3)
I can get out my calculator and figure out that there's a savings in utilities
and security personnel if I close my mall on Sunday and try offering you a lower
rent to lure you to move your store there.

I wrote:
>>     Are you suggesting that there is some unwritten code of ethics
>>in business that says you set your prices as X% of cost (X > 100), no matter
>>what?  You set your prices so as to maximize your profits. If raising prices
>>would increase your profits (to "compensate for the overhead"), what's keeping
>>you from raising them *now*, and just pocketing the increase? ...
>
>Then why do 7-11's charge more than your average variety store? Are they
>pocketing the extra cash, or are they compensating for the additional
>convenience of being open 24 hrs, 7 days a week? I'm not trying to be
>facetious. I'm just trying to understand the situation.

The 7-11's charge more for the additional convenience of being open 24hrs/day
WHEN THEY HAVE LESS COMPETITION.  They either can't figure out how to make
their prices functions of the time of day (so they could compete with Loblaws
at normal hours) or don't feel they would benefit enough from the extra sales
to compensate for the bad feelings (i.e., ``You mean this jar of pickles would
have been a dollar cheaper if I had come an hour ago?'').  Hence their prices
are set to balance off the loss of daytime sales (when people are very price
sensitive) versus the "easy gouging" that can happen at night (when people are
not price sensitive).  Many businesses do manage to adjust prices in response
to people's willingness to pay (cf.  pre-christmas vs. boxing day prices for
gift wrap), but only a few have figured out how to do it as a function of the
time of day, notably mass transit systems (but not the TTC) and movie theatres
(but, alas, not in Toronto again) that charge less for matinees....

Mart L. Molle
Computer Systems Research Institute
University of Toronto
Toronto, Canada M5S 1A4
(416)978-4928