J.C. Penney recently gave up on last year’s strategy to abandon sales and coupons in favor of “everyday low pricing.” As an article in the New York Times points out, “simplifying pricing, it turns out, is not that simple”:

“It may be a decent deal to buy that item for $5,” said Ms. Fobes, who runs Penny Pinchin’ Mom, a blog about couponing strategies. “But for someone like me, who’s always looking for a sale or a coupon — seeing that something is marked down 20 percent off, then being able to hand over the coupon to save, it just entices me,” she said. “It’s a rush.”

Devoted coupon users like Ms. Fobes may be more frugal than the typical consumer. But most shoppers, coupon collectors or not, want the thrill of getting a great deal, even if it’s an illusion.

The article goes on to indicate  that this type of illusion-seeking and the corresponding “rush” are sometimes due to certain levels of conditioning:

Even Walmart, which actually does pull off the trick of “everyday low prices” in its domestic stores, is finding it hard to convert consumers to a single-price model in countries like Brazil and China, where retailers give deep discounts on a few main products, then mark up the rest, said Mark Wiltamuth, an analyst at Morgan Stanley.

The problem, economists and marketing experts say, is that consumers are conditioned to wait for deals and sales, partly because they do not have a good sense of how much an item should be worth to them and need cues to figure that out.

Just having a generically fair or low price, as Penney did, said Alexander Chernev, a marketing professor at the Kellogg School of Management at Northwestern University, assumes that consumers have some context for how much items should cost. But they don’t.

Yet as AEI’s Mark Perry notes, from a producer and seller’s perspective, such schemes come in response to the ever-evolving and unpredictable demands of the consumer—in this case, particular shopping preferences. This is “not an enviable position to be in,” Perry writes, “to be at the mercy of fickle and unpredictable consumers.” Read more on Do We Want Prices to Fool Us?…

If your next date night costs you more, you can thank Obamacare. Regal Entertainment Group, the country’s largest movie theater chain, has announced that it is cutting employee hours due to Obamacare related costs.

One Regal theater manager told FoxNews.com the move has sparked a wave of resignations from full-time managers who have seen their hours cut by 25 percent or more.

“In the last couple weeks, managers have been quitting on a daily basis from various locations to try and find full-time work,” said the manager, who asked not to be named. “Regal up until now has never restricted anyone to anything below 40 hours.”

Read more on A Night At The Movies: Higher Costs, Less Hours For Employees…

“Is there a religious way to pump gas, sell groceries, or advertise for a craft store?”

In a new paper, “God and the Profits: Is There Religious Liberty for Money-Makers?,” Mark Rienzi asks the question. (HT)

Read more on For God and For Profit: Do Money-Makers Have Religious Liberty?…

PovertyCure was featured in Forbes Magazine last week. Alex Chafuen, one of Acton’s founding board members, featured PovertyCure in his article on champions of innovation. He writes:

A new multifaceted initiative, called PovertyCure, provides abundant materials and resources for those who want to create lasting solutions to poverty. The program is founded on the conviction that each human person can be a source of great creativity. It highlights the incentives needed to unleash the entrepreneurial spirit that fills the developing world.

Read more on PovertyCure: Lasting Solutions to Poverty…

In the forthcoming issue of Comment magazine, I examine how free trade orients us towards the good of others. In doing so, I argue against the value of pious banalities and cheap slogans. I include examples like, “Go in peace; keep warm and well fed,” or, “When goods do not cross borders, armies will.” The latter is often attributed to Bastiat, and while it captures the spirit, if not the letter of Bastiat’s views, the closest analogue is actually found in Otto Tod Mallery: “If soldiers are not to cross international boundaries on missions of war,” wrote Mallery in 1943, then “goods must cross them on missions of peace.”

Read more on Trade, Aid, and Bumper Sticker Strategy…

Writing for the Harvard Business Review, my friend (and coauthor) John Coleman argues that business professionals can benefit from reading poetry. While his article is not directed at people of faith, I think his claims are particularly relevant to Christians in the business world:

Read more on Why Christians in Business Should Read Poetry…

Every year Black Friday marks the official beginning of two modern American traditions: Christmas shopping and criticizing Walmart.

Critics on both the left and the right have found a common enemy in Walmart. Those on the left hate the company because it isn’t unionized while conservatives complain because it undercuts mom-and-pop retailers. Some researchers even claim that people are prone to gain weight after a Walmart Supercenter opens nearby.

I suspect if the researchers were to conduct a follow-up study they’d also find that there is about a 99 percent chance you will not be starving to death if you live near a Walmart store. But we live in a strange period in history when the idea of affordable food is considered a lamentable condition.

Walmart’s very business model—maintain a large and innovative supply chain that keeps prices low—offends the sensibility of those who think that prices should be raised in order to pay employees a higher wage. The idea that the higher cost should be passed on to consumers is typically made by those who would never actually shop at Walmart. A prime example is The American Prospect‘s Harold Meyerson:

Walmart replaced General Motors as America’s largest private-sector employer. Instead of paying its workers enough to buy new cars, Walmart paid its workers so little they had to shop at discount stores like Walmart.

The reason why Walmart employees—and others on the lower end of the income scale—shop at the stores is because they are, by necessity, price conscience shopper. Meyerson and other elites that spend only about 3.5 percent of their income on food at home can afford to shop at Whole Foods. But households in the bottom quintile, which spend 26 percent of their income on food, are eager to keep food prices as low as possible. (During this holiday season Walmart employees receive an additional 10 percent off most food items.) If Walmart didn’t exist they the company’s employees wouldn’t have higher paying jobs; they’d just be paying more for food and consumer goods.

Growing up in a family that lived below the poverty line,  I can appreciate the value of inexpensive food. That is one of the primary reasons I appreciate the company—and the reason I think other conservatives should appreciate it too. There is admittedly a lot to dislike about the company, but as former low-income rural resident I think there are a number of reasons why conservatives should be more supportive of Walmart (and similar poverty-alleviating corporations).
Read more on A Conservative Case for Walmart…

In the Autumn 2012 issue of Response, Jeff Van Duzer, wrote an article entitled, “Does Business Matter To God,” on the issue of faith and work. He is a well-respected professor of business law and ethics at Seattle Pacific University who gives a unique look into the role faith plays in business. This entire issue of Response is dedicated to the topics of faith and work. I will write about a few other noteworthy articles over the coming weeks.

Van Duzer starts the article by recounting a conversation he had with his father on the purpose of business. In the middle of his attempt to explain his view on the matter, his dad interrupted him and said:

Jeff, everyone knows what the purpose of business is. The purpose of business is to make money.

Read more on Business, Profits, and Faith…

Over at Christianity Today, HOPE International’s Chris Horst, whose article on a Christian manufacturer was recently highlighted at the PowerBlog, focuses on yet another Christian business, this time dealing in mattresses:

“This is one of the sleaziest industries in the world,” says business owner Ethan Rietema. “Customers are treated so poorly. Stores beat you up, trying to get as much money as they can, but they couldn’t care less if you get the right bed.”

Rietema and Steve Van Diest, both former campus ministers, are bringing rest—and integrity—back to a business largely devoid of it. Four years ago, a Christian entrepreneur invited the Colorado natives to begin deploying their relational abilities in strip malls rather than on college campuses. They now co-own three Urban Mattress stores in Denver and have franchised four more. And, they argue, their current work is just as important as their former ministry….

…”I don’t have to do mental gymnastics with the product I sell,” Van Diest says. “It’s not a frivolous item. It’s not an image-conscious product. People come here after being worn down by horrible sleep, replete with aches and pain. If we can provide them with a small glimpse of grace for a third of their lives, that’s kingdom work. That matters to God.”

Every entrepreneur begins by identifying a need. For Rietema and Van Diest, it was better customer service and consumer information. Urban Mattress has grown its business by directly countering a status-quo industry environment of price misinformation, offering “consistent and fair prices that promote transparency and honesty.” No faux “blowout sales,” no shady product labeling, no overly hasty, overly pushy customer interactions.

Read more on Bringing Spirituality to ‘One of the Sleaziest Industries in the World’…

The Goldwater Institute has released a new study showing that states with a larger share of entrepreneurs do a better job at reducing poverty than states with fewer entrepreneurs.

There is a strong connection between a state’s rate of entrepreneurship and declines in poverty. Statistical analysis of all 50 states indicates that states with a larger share of entrepreneurs had bigger declines in poverty. In fact, comparing states during the last economic boom—from 2001 to 2007—data show that for every 1 percentage point increase in the rate of entrepreneurship in a state, there is a 2 percent decline in the poverty rate.

Read more on Want to Lower Poverty Rates? Increase Entrepreneurship…