[In the Fight Against Inflation Clothing Retailers Play an Important Part] [From the U.S. Government Publishing Office, www.gpo.gov] REVISED Clothing Retailers ||||Pla3^^ Important Part ii A BRIEF EXPLANATION OF THE NEW ’»RETAIL BASE DATE PRICING CHART REGULATION” MPR-580 BEGINS ON PAGE 16 OF THIS BOOKLET UNITED STATES OFFICE OF PRICE ADMINISTRATION Department of Information March, 1945 Approved as visual aid for Community - Clothing Dealer Conference Retailers Remember That: DURING WORLD WAR I... Wholesale prices rose 103%. After the Armistice they went up another 4?%. THEN THEY CRASHED! When the Crash Was Over... 106,000 Firms had failed ....... 453,000 Farms had been foreclosed..................... Unemployment increased by 5,600,000.... Customers w/thout pa/checks !........... INVENTORY LOSSES TOTALLED $ 11,000,000,000 2 SO FAR... DURING THIS WAR... The line against inflation has been held much better. Since the May 1943 "Hold the Line Order" overall prices have risen only 1.4% (through February, 194?). CLOTHING PRICES HAVE I This threatens the entire stabilization program. 3 RETAILERS KNOW THAT IF... Clothing prices continue to rise at the present rate... The line on the cost of living will be broken. The whole Stabilization Program will break down, and Though we win the war on the battlefronts. we will LOSE the war on the HOME FRONT. they are NOTsowg TO LET TH/S HAPPEN! 4 5 RETAILERS have seen the wartime stocks of the clothes their customers need most get smaller and smaller month hy month. They KNOW that the Home Front must have essential clothing at prices people can afford to pay... And...RETAILERS will do their part to SEE THAT THIS IS DONE*. 6 OPA-WPB CLOTHING PROGRAM ... for the Miu. for the Converter for the Manufacturer for the Wholesaler for the Retailer - 7 TO THE MILL IT MEANS..... In general, textile mills will produce each type of material at average prices which are the same as their average in a base period. 8 TO THE CONVERTER IT MEANS.... A recent amendment to the “Converter Regulation” effective January 1, 1945, stopped much over-finishing and over-fancying of simple materials by converters. Each converter must finish at least 75% of his cloth to fit the orders of manufacturers who have priorities for material to produce essential garments. This means more of available supplies will be suitable for the essential low and medium priced garments people need most. 9 TO THE MANUFACTURER fr means . . . Priority to get textiles to make garments your customers need most. Producing these essential garments at the same average prices he charged during the base period of July 1, 1942—June 30, 1943. 10 AT WHOLESALE /T MEANS... That many inter-jobber sales are prohibited. Unnecessary jobber markups are eliminated. And "Dummy Jobbers" are done away with. 11 IN GENERAL THIS IS HOW THE PRIORITIES QUOTA SYSTEM WORKS 12 HOW DOES ALL THIS AFFECT the RETAILER ? 1 Retailers will be able to get a greater proportion of essential low and medium priced clothing to meet the demands of their customers. 2 All retailers, large and small, will have a chance to get their fair share of the available supply. 3 The prices will be lower and the quality will be better on clothing that retailers offer to their customers. 4 This Clothing Program will do much to build and maintain Customer Goodwill and Confidence for the retailer... He will be able to give his customers more of the things they want...at prices they can afford to pay. 13 5 The retailer will be given a more simple regulation for pricing his goods. Most clothing, house furnishings. ana furniture will ba iakaa aat from under General Maximum anil Plaael under a almala pricing chart method similar to MFR 330 (Women’s and Children’s Outer Wear). EVEN UNDER STRICT WARTIME MEASURES.... AND A TOUGH PROGRAM... The Retailer will derive all of these benefits. 14 There are some things the retailer must do to make the program work He must support it and recognize that, although it is tough... He can get something out of the program by working with it. new.... He must do the mechanical things in his store that will put the program to work for him. is A MESSAGE TO RETAILERS ABOUT THE NEW BASE DATE PRICING CHART REGULATION AND WHAT IT MEANS TO THEM The steady Increase since the fall of 1942 in the family bill for clothing and home furnishings has made it necessary for the Office of Price Administration to change and Improve the controls over prices charged by sellers of clothing and home furnishings at all levels of production and distribution. As one step in that program, a new Retail Regulation has been issued. It supersedes the GMPR and other freeze regulations for retail sales of many of those items and substitutes a mark-up control. This booklet contains a brief explanation of the part clothing retailers play in the program. Study it carefully. By carefully following the simple instructions and examples, you will be able to prepare your pricing chart and use it to price your merchandise* By so doing you will be making a worthwhile contribution to the success of this all-Important home front program. 16 Here are some of the highlights of the regulation: 1. It applies to you if you sell at retail men*st womens, children*6 or infants1 wearing apparel, accessories, or shoes, household textile items like blankets, towels, or sheets, yard goods, furniture, floor coverings, lamps, or bedding and other articles. (A list of the articles covered by this regulation is printed in the "Base Date Pricing Chart" Regulation.) 2. It requires you to prepare a "base date pricing chart." This chart consists of a list of your costs and your prices for the items covered by the regulation, which you were selling on March 19, 1945. (Sample charts are printed in this booklet with simple Instructions telling how to make and use your pricing chart.) 3. Two copies of your chart must be prepared and filed with your OPA District Office by April 20, 1945. 4. Starting April 20, 1945, every retailer must correctly price ail of his merchandise covered by the regulation according to the prices on his new chart'. 5. RETAILERS MUST FIND THEIR CEILING PRICES BY TAKING THE "MARK-UPS" THEY TOOK ON THE "BASE DATE." Under no circumstances may a retailer Increase his mark-ups above the mark-ups he took on March 19, 1945. 17 7. By April 20, 1945 you must mark or tag all of your ceiling prices so they are clearly visible to your customers as follows: “CEILING PRICE $ OR "OUR CEILING $*" (a) Marking: Placing the ceiling price on the shelf, bin, rack, or container where the article is kept; but you may use this method only if all articles in or on the shelf, bin, rack, or container have the same ceiling price* (b) Tagging: Marking the ceiling price on the article itself or on a tag or ticket attached to the article* Marking may not be used when the container, room or place where the article is kept is not readily visible to the customer. 8. On and after April 20t 1945, you are required to retail your invoices for the merchandise which this regulation covers. That is, you must put your first selling price on the invoice. Unless you keep a record of all sales at other prices, the, selling price shown on the invoice will be taken as the price at which you actually sold all the articles covered by that invoice. 9. ON AND AFTER MAY 3, 1945, YOU MAY NOT SELL ANY MERCHANDISE COVERED BY THIS REGULATION UNLESS YOU HAVE FILED A CHART AND RECEIVED AN ACKNOWLEDGEMENT OF IT. 18 THE »BASE DATE PRICING CHART» IS THE HEART OP THE RETAIL REGULATION It la the retailer’s part in the new government clothing program. YOUR CHART INVOLVES SIX STEPS YOU MUST LIST: 1. Your net cost for each price line. 2. Your offering price for each article. 3. Your invoice for each costline. YOU MUST FIGURE: 4. Your Circled Price. 5. Your percentage mark-up for each costline. 6. Your average percentage mark-up for each category. NOTE: IN ORDER TO FIND UNDER WHICH CATEGORY YOUR MERCHANDISE MUST BE LISTED - REFER TO APPENDIX C OF THE “BASE DATE PRICING CHART“ REGULATION. 19 SAMPLE WORK SHEET MARK-UP ON COST METHOD FOR BASE DATE PRICING CHART ** ¿4/ways Tenure only one category at a time NOTE: When transferring your records from your “work sheet” to your "Permanent Chart," everything remains as shown above with the following exception: In Column 1. the same net cost should appear only once on your chart -opposite a "circled price" - all other net costs of the same amount drop out as Indicated in the work sheet by a line drawn through them. The totals of Columns 2 and 3 should not be transferred to your official "Pricing Chart." SAMPLE WORK SHEET MARK-UP ON SELLING PRICE METHOD for base date PRICING CHART ★ * A/ways enfy âne ea/e^onya/a âme NOTE: When transferring your records from your “work sheet* to your "Permanent chart t" everything remains as shown above with the following exception: In Column 1, the same net cost should appear only once on your chart -opposite a "circled price" - all other net costs of the same amount drop out as indicated in the work sheet by a line drawn through them. The totals of Columns 2 and 3 should not be transferred to your official "Pricing Chart." HOW TO FIGURE YOUR AVERAGE PERCENTAGE MARK-UP FOR EACH CATEGORY (Tp Be Entered In Column 1) (Figures Taken From Sample Work Sheet) After you have listed your offering prices for each cost- line and entered them in Column 3/then: (1) get total of all offering prices (Column 3) — $44*99 (2) get total of all net costs (Column 2) — $26.94 (3) Subtract $26.94 (total net costs for category) from $44.99 (total offering prices for category:) Thus: $44.99 -26.94 $18.05 This is your dollar mark-up for this category. Then: Divide $18.05 (dollar mark-up) by $26.94 (total unit cost) - Thus: $18.05 -r $26.94 = 67# 67# is your average percentage mark-up for the category if vodr chart is based on "mark-uns on cost;“ Enter 67# in Column 1. NOTE: If you want to figure your mark-ups on selling price... Divide the result of step (3) - $18.05 by $44.99 (total offering prices) - Thus: $18.05 ~ $44.99 - 40.1# 40.1 # is your average percentage mark-up for the category if your chart is based on "mark-ups on selling price." Enter 40.1# in Column 1. Decide whether you want to use mark-ups on cost or on selling price. Then you must use the same method for all categories in your entire chart. 22 WHAT IS YOUR "CIRCLED PRICE"? If items in a category which have the same net cost were offered, at two or more prices on the base date you must figure a “circled price.“ This “circled price" becomes your permanent celling for all items of that net cost in that category. NOTE: When you have a "circled price" on your work sheet,. the percentage mark-up of the circled price only is listed on the chart. All other percentage mark-ups of articles with the same net cost drop out as shown in Column 4 of sample work sheet. * HOW TO FIGURE A "CIRCLED PRICE" 1. Take all the items in a category with the same net cost that you offered at different prices on the base date. Thus: Shirts $1*38 net cost — offering price $2.25 each Shirts $1.38 net cost — offering price $2.50 each 2. Apply the "average percentage mark-up" for the category (67.0% — on the sample work sheet) to the net cost ($1.38). Thus: Multiply $1.38 by 67.0% which equals $.9246 or $.92 Then add $1.38 (the net cost) You then get $2.30 The offering price on your work sheet nearest to this ($2.30) is your "circled price." $2.30 is nearer to $2.25 than it is to $2.50 on the sample chart. Therefore, $2.25 becomes your circled or ceiling price for all items in the category which cost $1.38 net. NOTE; If you figured your average percentage mark-up on selling price, and entered 40.1% in Column 1, you Would apply your mark-up thus: Subtract 40.1% from 100% which equals 59.9%. Then divide $1.38 (the net cost) by 59.9%. You again get $2.30. You proceed to find your circled price of $2.25 in the same way as described above. 23 HOW TO FIGURE YOUR MARK-UPS FOR EACH COSTLINE IN A CATEGORY (COLUMN 4) ON YOUR CHART (Figures Taken From Sample Work Sheet) 1« Subtract your net cost $1.21 (Col* 2) from your offering price $1.98 (Col. 3), thus: $1.98 - $1.21 = $0.77. 2. Divide the result of step 1 ($0.77) by your net cost ($1.21) thus; $0.77-r $1.21 « 63.6%. Use the above method to figure the percentage mark-up of each separate costline in each category and list them in Column 4 on your chart. NOTE: If you figured your average percentage mark-up on selling price.•• Divide the result of step 1 ($0.77) by your offering price ($1.98) .in the example above. Thus: $0.77 4- $1.98 - 38.9^ - percentage mark-up on selling price. 24 HOW TO USE YOUR CHART TO PRICE ALL ARTICLES THAT BELONG IN A CATEGORY (LISTED IN COLUMN 1) First, take part of the chart that applies to the category of the article that you are pricing* Rule 1« To price an article bought at a cost listed in Column 2 of the chart# use the offering price listed in Column 5 for that cost« If more than one offering price is listed on the chart for the same net cost: Use your "Circled Price«" This is your ceiling price for all articles bought at that net cost« (See example of "Circled Prices«") 25 Rule 2. To price articles you buy at a higher cost than any listed in that category, apply the "average percentage mark-up* for that category listed in Column 1 of your chart* Example 1: (Figures Taken From Sample Work Sheet) If your cost for a new article is $5.75 and ' your average percentage mark-up on cost for the category is 67*0% you would multiply $5.75 by .670 which equals $3,852 or $3.85; then add $5.75; Thus: $5.75 X .670 * $3.85 AND $3.85 + 5.75 $9.60 This would be your Ceiling Price. Example 2: If you had figured the mark-ups on your chart on selling price, and had therefore listed 40.1% in Column 1, you would subtract 40.1% from 100% (59.9%) and then divide $5.75 by 59.9%. Thus: 9,598 .599 ¡5.75000 Your ceiling price for the article in either case would be $9.60. 26 Rule 3. To price articles you buy at lower cost than any listed in a category, apply the mark-up listed for the lowest cost in the category. Example 1: (Figures Taken From Sample Work Sheet) If your net cost for a new article in a category is $1.10, and the mark-up on cost for the lowest cost article in the category is 63,6%... Multiply your net cost ($1.10) by .636 which equals $.70« Then add your net cost ($1.10). Thus: $1.10 X .636 = $0.70 AND $0.70 •H.io $1.80 This would be your Ceiling Price. Example 2: If you had figured your percentage mark-ups on selling price, the mark-up for your lowest cost would be 38.9%. You would then subtract 38.9% from 100% (61.1%) and divide the net cost ($1.10) by 61.1%. Thus: 1x80. .611 | 1.10 Your ceiling price for the article in either case would be $1.80. 27 Rule 4, To price articles bought at any other cost not listed in Column 2 of the chart, apply the mark-up listed in Column 4 for the next lower cost« Example 1: (Figures Taken From Sample Work Sheet) If your net cost for the new article is $1*49 and the mark-up for the next lower cost in the chart ($1.38) is 63.0%: Multiply your net cost ($1.49) by the mark-up for your next lower cost (.630) which equals $.94. Then add your net cost ($1.49) thus: $1.49 X .630 = $.94 AND $0.94 fl. 49 $2.43 This would be your Ceiling Price. Example 2: If you had figured your percentage mark-up on selling price, the mark-up listed for your $1.38 cost would be 38.7%. You would then subtract 38.7# from 100% (61.3%) and divide your net cost ($1.49) by .613, thus: . sas. .613 11.49 Your ceiling price for the article in either case would be $2.43. 28 HOW TO PRICE ARTICLES IN A CATEGORY COMPARABLE TO A CATEGORY LISTED ON YOUR CHART Rule 5: To price articles of a category not listed in Column 1 of your chart but comparable to one of these categories, you price the new articles under Rules 1, 2,3, or 4 as if they belonged to the first comparable category listed on your chart« (See comparable categories, Appendix D of the regulation to find which categories are comparable«) 29 M/ATELSE CAN THE RETAILER GET OUT OF THIS PROGRAM ? He can take full credit for striving to supply his customers with more of the things they demand. Better quality clothing at prices they can afford to pay. This will Protect and Build Goodwill and Confidence of his customers . 30 HOW CAN THE RETAILER DO THIS ? 1 By tyL$g the program - and his support of it - into his advertising. 2 By building the program into his store and window displays. 3 By letting his customers know by every means available...that he is making every effort to see that his customers get the clothes they need at the prices they can afford to pay. 31 WE ARE COOPERATING TO KEEP ^^<1 CLOTHING WJ PRICES OWN U. S. GOVERNMENT PRINTING OFFICE O--1945