Abstract
Abstract In this paper, the proportions and determinants of price rigidity in German food retailing are investigated for selected products. In measuring price rigidity, we explicitly consider promotional sales by excluding price promotions. Price promotions cause a significant part of retail price variations, but are by definition not based on cost changes. Thus, if price promotions are not considered, price rigidity measures are biased. The average estimated duration of rigid prices in supermarkets increases from forty to sixty weeks, if price promotions are excluded. All food products show considerable price rigidities. In particular, key products with a high level of consumers’ attention indicate significantly lower price rigidities. Psychological prices are more rigid than others. Unexpectedly, high price (national) brands exhibit greater price flexibility than low price private labels. From this we may conclude that rigid food retail prices are not caused by retail market power, but by implementing a...
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
