Wuhan Shopping Malls &Nbsp; Department Store Dispute "Seven Days Original Price"

In June, the national development and Reform Commission, the Ministry of Commerce and the China Federation of trade unions also received a proposal document from Wuhan, which advices to modify the provisions of the "seven day original price" in the management measures of retailers' promotion practices.

Wang Bingyan, President of Wuhan business association, even personally went to Beijing to hand in documents to reflect the situation.

On the eve of the May 1 Golden Week this year, the national development and Reform Commission inspected some large business enterprises in Beijing, Shanghai, Wuhan and other places, and found that more than 20 shopping malls had false promotional activities such as "false high original price and discount". The highest level of these shopping malls was fined 500 thousand yuan.

Beijing Parkson, Beijing Jun Tai, Wuhan Gome, Shenyang new world department store, Nanjing Central

Subsequently, the NDRC joint Consumer Association issued a circular calling for the promotion of clear price sales in the national department stores.

The price departments in various localities have launched strict inspections one after another, so the definition of "original price" of commodities has been brought back to the cusp of the storm.

It is reported that Wang Bingyan was the director of the Wuhan Municipal Commercial Commission (now the predecessor of the Commerce Bureau).

Petition

In this joint name, the "seven day original price" is applied to department stores and supermarkets.

Subsequently, according to the reflection of the member enterprises, the Wuhan business association made a special investigation and found that the punishment of "price fraud" on China Merchants square, new world department store and Ocean Department Store violated the provisions of the national development and Reform Commission's [2006]623 document on the interpretation of the original price.

China's "management measures for retailers' promotion practices" stipulates that the so-called "original price" refers to the lowest paction price that the operator has traded in the paction place within 7 days before the price reduction. If there is no paction price on the previous seven days, the last paction price before the price is taken as the original price (hereinafter referred to as the "seven day original price").

That is, the discount price should not be based on the suggested retail price of the commodity tag, but the lowest paction price within seven days before the price cut.

In actual operation, most of the "original prices" in various stores are executed at the price tag, so this clause is the most vulnerable area for merchants to encounter.

The "seven day original price" is also known as the "seven day warning line" by the market.

The above documents consider that the interpretation of "original price" by the NDRC [2006]623 document is not in line with objective reality, and the punishment on China commercial square, new world department store and ocean department store is unreasonable (because it is not intended to be a "price fraud").

An industry insider said that enterprises in Beijing, Shanghai and other places did not understand this rule, but they did not reflect Wuhan's representative to Beijing.

Unreasonable reason

The document considers that the reason why the "seven day original price" is unreasonable is three.

First of all, the NDRC's explanation of the original price changed its connotation and definition.

It is customary to use the tag price as the original price.

The "seven day original price" explained by the NDRC completely changed the original meaning of the original price of commercial retail price, and became the first discount price and the second discount price.

Secondly, according to the practice of "seven days original price", the "original price" has become a dynamic price, while the retail stores or stores are characterized by the variety of commodities and the price changes. The price management has computerized operation and manual operation. It is necessary to ensure the consistency of commodity label price, display tag price and paction settlement price. If the dynamic management operation is based on the "seven day original price", the price management system of the store will become more and more complicated, which will eventually lead to the failure of normal marketing activities.

Since the price department punished three shopping malls in Wuhan in April 13th, the retail market in Wuhan has been "neglected".

According to the document, Wuhan department stores and supermarkets did not dare to carry out discounted promotional activities during the May 1st day. They dare not mark the original price of the goods and dare not use the price tag. All of them showed "clear price" to consumers. Some unidentified customers asked their salesmen, "why don't you give them a discount?" {page_break}

The Wuhan Business Association said that the biggest problem with Wuhan's retail businesses is that promotion activities such as Saturday and Sunday will be followed by seven days' original price. They must wait for seven days before they can be discounted. The interval between last week and next week is only five days.

But due to industry characteristics, sales on the two days of Saturday and Sunday are equivalent to sales from Monday to Friday. Once missed, it is hard to make up for it.

Xie Shiping, chairman of the US East department store, also said that the "seven day warning line" clause is not operable, and consumers can not check the original price of the paction within 7 days of buying a commodity.

For example, he said that if the golden week promotion campaign was launched from May 1st to 3, a brand clothing would be offered 20 percent off discount, and then the original price would be restored. 4 days later, the promotional activities of mother's day would be launched and the 30 percent off discount would be launched.

According to the regulations, the practice of the brand clothing compliance is 30 percent off on the basis of 20 percent off, which should be 44% off, but in fact, many supermarkets only execute 30 percent off according to the retail price of clothing labels, which is a "false discount discount".

People from the Wuhan business association believe that the "seven day original price" is bound to die too much, which not only restricts the right of independent operation of retail enterprises, but also obliterate its business characteristics.

Resolvent

Some of Wuhan's shopping malls are now keeping tabs on such words as "original price" and "special price", claiming to be "dancing on the wire".

At present, Shanghai has begun pilot implementation of "real sale".

All the discount brands in the shopping mall were removed and changed to a single price.

But Huang Wenjie, executive director of Guangdong provincial Circulation Industry Association, pointed out that Shanghai has a precondition for implementing the "real price sale" in department stores, which is led by the price department, and the original price of all goods in the Shanghai area is all downgraded.

Because it is very difficult to launch a real price sale solely by a shopping mall, which will lead to the disorder of the price system.

Huang Wenjie said that the government should not interfere too much in market behavior, as long as we do two things well, one is regulation and the other two is enforcement.

According to the people of Wuhan business association, our idea is that, on the basis of not violating the policy of the NDRC, we can only engage in promotional activities on holidays, such as new year's day, Spring Festival, national day, and festivals.

It is reported that the Wuhan Price Bureau is currently doing a thorough investigation of retail businesses, and will also reflect the views of enterprises to the higher authorities.

The above-mentioned admonition document finally wrote that it is suggested that, on the basis of careful investigation, the NDRC should start from the "seven days' original price" from the perspective of "giving benefits to the people" from the point of view of mobilizing the business enterprise's initiative and expanding domestic demand.