28/02/2002 00:00
The sales flop
The shopkeepers have given their verdict; the winter sales which finish this week have been a flop. It was the local government with much back-slapping who decided to organise the sales calendar, in other words politicians decide when and where shops are allowed to reduce their prices. Now, curiously enough the government mandated sales period started bang in the middle of the launch of the new single currency. The chances that people would go on a spending spree with notes and coins they didn't know or understand, were pretty limited. Also, for a variety of reasons there has been a slump in winter tourism and therefore there were far fewer tourists shopping on the High Streets. I am sure that if you had asked any shopkeeper in early January if he or she wanted the sales to be delayed the majority would have voted for a postponement until Easter when most people had become accustomed to the single currency and there were more tourists about. This the major problem with politicians trying to control the private sector, it doesn't work. You can't decide on shop sales months in advance because it naturally depends on market conditions. If the conditions aren't right then cash registers will not be as full. The local government must allow shopkeepers and big stores to decide when the time is right, because they are on the frontline and they know their market. A free market and free commerce is designed around the basic theory of giving people what they want, when they want. In the case of the Balearics at the moment it is the local government deciding when and where, which as we have seen is a recipe for disaster.
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