Should a product that requires more materials cost more? A simple assessment might suggest such a link is logical and reasonable. But when it comes to fashion, the assessments are anything but simple or logical.

In particular, in the women’s clothing market, size assessments are sensitive, difficult, and fraught with emotion. When a shopper at a British clothing chain New Look realized that she was paying 15 percent more for her shirts, dresses, and pants than women who wore smaller sizes, she accused the company of charging a “fat tax.” The pricing strategy used by the retailer established two broad categories, such that all “standard” sizes featured one price level, whereas all “plus” sizes were more expensive.

In defense of their pricing strategies, some retailers emphasize that the larger sizes require more material, as well as unique design options. For example, larger pant sizes often feature contoured waistbands, which can cost more to design and produce. Thus they regard the price distinction as reasonable and appropriate, rather than discriminatory.

But those arguments are hard to defend in all cases. Women who wear larger sizes argue that charging a higher price for the same products is clearly discriminatory and offensive. They note that petite clothing rarely costs less, nor do tall sizes or maternity wear cost more, even though they too require more material. In another incident, shoppers at Old Navy complained that it charged more for women’s larger sizes but not for men’s.

One option might be to establish a pricing tier with additional levels, such that petite people, whose clothing uses relatively less material, pay the least, and the largest sizes pay the most for the additional material. Even in this case though, the emotional implications involved in clothing would come into play. As one shopper explained, “Dressing in bigger sizes can be a sensitive issue for women. It’s almost like the shops are trying to make a point by putting up the price. It’s like they are saying, ‘Lose some weight, love.’ And that’s just mean.”

Discussion Question:  

1. Why do New Look and other retailers charge more for larger sizes?
2. Is this tactic good for business? What other options could these retailers consider?

Source: Ceylan Yeginsu, The New York Times, May 16, 2018