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. Jessica says:

    I don’t understand this scenario at all beings i am an extra small and cannot for the life of me find clothes that fit whether at full price or discount outlets the extra small to me seems to be extinct

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  2. Tim says:

    Seems nobody really knows the answer. There must be some unpublished economic forces at work here. Business people are not stupid. It seems almost every store I go to has S and XXL sizes in piles everywhere, and 1 M size in red.

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  3. Dave McGarvey says:

    My “best guess” is that XS and XXL are minus 3 and plus 3 standard deviations of clothing size sales and unless stores maintain careful records of what they have purchased in the past, it would be easy to overbuy these sizes, and underbuy the more commonly purchased sizes. This is supported by popular sizes usually being sold out. The idea that people with extra small or extra large requirements not caring about their appearances or not wanting to invest in clothing to look good in is speculative and biased at best.

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  4. Bill Ogorodny says:

    I believe that many people in the XXL and XL sizes are lower income people. It is expenmsive to eat foods with nutrients. It is much cheaper to fill up on McDonalds food and large amounts of soda.

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  5. Natalia says:

    Could it be that people just want to belive they are in the middle sizes and that’s why they are less prone to buy clothing that are labelled in the extremes? if you are and XXS you can probably also wear the XS. I notice that this does not happen so much with the kids clothing that are on sale, probably bacuase we parents buy right sizes for our kids…just a thought…

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  6. John Pilge says:

    In the discount stores, they get the items that OTHER STORES could not sell for the season. Usually the odd sizes make up the bulk of the shipment.

    When there is a sale, most people buy the most popular sizes. What is left are the least popular sizes. I have seen my size sell out in a day. (They have it in the evening the night before the sale, but they are all gone the day of the sale by the time I get off work and can visit the store.) Think about it. You are finding all those odd sizes, DURING a sale or right after a sale.

    Do large people buy fewer clothes? My experience says yes. They are less active and can make their clothes last longer.

    If you do your own shopping, notice how few extra large/small people actually shop at the store that has excess odd sizes.

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  7. jane says:

    There are fewer of smaller and larger people – store buyers know that, and adjust their orders accordingly.

    However, buyers’s are mostly trained in predicting desires and willingness to pay of average-size people. That makes sense, since there are more of these people, and being prepared to handle them causes more profit/loss overall for a retailer. So, buyers are more often wrong when ordering stuff for people of rare sizes, the extra-smalls and extra-larges.

    People often complain that it is impossible to find sizes 0 (zero) and 2, and there is nothing good to buy in sizes 22 and up. And, this is the stuff that ends up on the sales rack. Retailers seem to continuously stock the wrong things.

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