Can culture affect prices? A cross-cultural study of shopping and retail prices

Abstract

This study examines whether there are differences in consumers’ shopping behavior and product prices in grocery stores due to cultural orientation. The study uses a field setting in Southern California, comparing samples of American and Chinese culture on two occasions, each five years apart. Theory suggests that price sensitivity and the importance of the status of buyers differ substantially between Chinese and American cultures. Consistent with these differences, the study finds that these two cultural groups have dramatically different shopping practices. Chinese use multiple senses when examining unpackaged food, and do so far more than American shoppers. They also inspect many more items and take much more time to shop. The differences in shopping behavior correspond to clear differences in prices between grocery stores serving the two cultural groups. Chinese supermarkets have substantially lower prices across a range of food products than mainstream American supermarkets. These differences ranged from 37% for packaged goods of the same brand and size to more than 100% for meats and seafood of the same type and description. These differences are similar across a span of five years. We argue that differences in culture provide the most likely explanation for the differences in prices between the two types of super markets.