Why Are Discount Stores Full of XS and XXL Clothes?

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My former Ph.D. student and frequent co-author Erik Snowberg sends along an interesting question:

Why do discount clothing stores (like Nordstrom Rack — and clothing sales in general) have an excess of really small and really large sizes?

I have to admit, I’ve always wondered. Erik continues:

The typical answer seems to be that there are more medium [people] in the world than XXL’s. Duh.

But the problem with this idea is that clothing buyers for stores obviously know this. And if they didn’t at first, they should have figured it out by now.

Hmm. He’s right — it is important to think about the supply side as well as demand. If there are twice as many mediums as XXL’s, then twice as many should be produced; and so it should be about as likely that a store will be left with excess mediums as XXL’s.

Here’s Erik’s explanation:

My best guess is that for some reason small and large people are, in general, less willing to pay for clothes. Maybe because they are outside of the norms for physical beauty, they believe that sharp clothes won’t help them that much.

Whatever the reason, a clothing store can’t set lower prices for different sizes, so it price discriminates by waiting a little bit and putting remaining stock on sale — which happens to be (surprise!) in the large and sometimes small sizes.

That’s a pretty interesting story, and it may well be right. But there must be readers with better information, or competing theories.

What are your thoughts?

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  1. Scott says:

    The explanation in the post can not be right. Surely buyers would have figured out this behavior by now. In fact they probably only know how much of particular sizes sell, not how many people are of a particular size in the population. I think post #8 gets it right.

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  2. BG says:

    I asked my sister who is in retail industry and this is her answer:

    The way clothes are bought is by ratio for packaging. And the sum should add up to 6 (half dozen) for example if you order 2-2-2 that is ordering 2 small, 2 medium and 2 larges of the same shirt. We order 1-1-2-2 which means 1 small, 1 Medium, 2 larges, and 2 X-larges. The interesting part is that it used to be 1-2-2-1 and we changed it 2 years ago to accommodate for the over-weight epidemic that is taking place.

    Now when you look at it this way you really don’t have an option of ordering less than 1 small per half dozen. and it’s not a good idea to not order a small at all, because you are loosing that one customer who might need it! you can’t discriminate. so, if you order 144 of a shirt with the ratio of 1-1-2-2 you still end up with 24 smalls but you might only need 13 smalls so the rest ends up on the clearance rack.

    Buyers know this already and believe me the money that is generated from selling 30% of the order full price covers all the first cost. So, the price of loosing small customers is much higher than loosing a few dollars on clearance.

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  3. Chris says:

    Being an XXL myself (thankfully because I’m mostly tall, not mostly fat) it seems to me there is a much simpler explanation. However, I actually doubt the initial claim in the first place… show me some empirical evidence. Since I routinely look for clothes at discount stores and RARELY find my size. This especially applies to discount shoe stores. I wear a size 15, and I can tell you with certainty, that it is nearly impossible to find any kind of selection in this size.

    But, if the original assumption is indeed true, wouldn’t a simpler explanation be that there are far more people buying the “middle sizes”, so the likelyhood of finding “fringe sizes” would be much higher… the stock would sit longer and accumulate, making it more prevalent.

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  4. Alison says:

    I agree with #48 and #20 and #170- the whole premise is suspect – I’d like to see some facts or studies to back it up. I am a woman snd have never been is a discount store that had a glut of my size (XS). To the contrary, in my experience as a frequent discount shopper, I normally see very few XS sizes on the rack – but I do often see a high number of large and XL sizes.

    This just doesn’t jibe with reality to me.

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  5. Will says:

    In order to attract a customer, a retail store must display a reasonable selection of merchandise in that person’s size. What that means, in practice, is that stores must have a full selection of merchandise for each size. More shoppers are in the medium sizes, and so they make more purchases and buy a larger percent of the total selection of medium-sized clothes. Because there are less shoppers at the extremes (XXLs and XXSs, e.g.), there are fewer purchases of those sized clothes. However, since stores needed to purchase the full line of clothes in those sizes to provide adequate selection, a smaller percentage of extreme-sized clothes are purchased, relative to medium-sized clothes.

    My guess is that because the cost of production for an item of clothing is small, retailers are more willing to have excess stock on hand at the end of the season than to miss out on potential purchases during the season due to a lack of variety of certain sized clothes.

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  6. wisdom says:

    Ouch. I believe that people who do not look “naturally attractive” would probably spend More to compensate, than those who are seen as “naturally attractive”. Attractiveness is a form of social capital and people seek to optimize their “worth”… the same as any other kind of capital.
    ————————————————–
    People aren’t particularly rational. Or they’re rational enough to realize that clothing won’t do much to disguise excess weight and maybe a naturally unattractive face that first led to body neglect and that it’s not worth spending much on such clothing.

    Also, obesity among young people is growing, but still people tend to get heavy toward middle age. That’s also a period when interest in maximizing presentation declines, except maybe in white-collar jobs. (It’s no secret that many men’s suits are cut large in the body.)

    So yes, larger people probably are cheaper when it comes to clothes.

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  7. Nancy says:

    My son is too tall to wear boy’s pants and needs a men’s small or medium. We’ve had no luck finding these sizes, though. Men’s departments seem to be universally stocked with L-XXL pants, with nary a M or S in sight.

    At any given time, large numbers of boys will be in this size range. Why on earth can’t store buyers spring for a few more S and M pants?

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  8. Tom says:

    I doubt the observer finds clothing that they *want* in sizes too large or small…

    I am 6’9″, 300 pounds. Clothes don’t fit me well so I don’t go shopping very often. It’s a frustrating experience because most standard shops don’t carry my size.

    It probably only seems that very large clothing is available to the big or small but the reality is that those items are usually very ugly. The savvy large shoppers call ahead of a shipment to be able to buy the best items.

    The only shoes Nordstrom Rack has are very colorful basketball shoes (clearly leftovers from basketball team orders) and dress shoes (clearly the rest of us are successful business men). Casual clothing basically stops at shoe size 13 and shirt size XL (XLT if we are lucky). I am a 15 and have better luck on ebay.

    I am sure that average sized people are used to being able to buy whatever they like and so they more frequently go to discount stores. What they are experiencing is something similar to what very tall people and very short people experience perpetually… scarcity in their size…

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