TY - JOUR
T1 - Supermarket Promotions and Food Prices
T2 - A Note
AU - Lan, Hao
AU - Lloyd, Tim
AU - Morgan, C. Wyn
N1 - Publisher Copyright:
© 2014 The Agricultural Economics Society.
PY - 2015/6/1
Y1 - 2015/6/1
N2 - Using a sample comprising nearly 250,000 weekly prices from the largest seven UK supermarket chains, this note investigates two pricing practices that have attracted public interest: the tendency for promotions to 'disguise' rises in non-sale prices and the inflation of prices prior to sales which 'exaggerate' the discount. Analysing price dynamics before and after periods of promotional discounting results show post-sale prices are typically lower than pre-sale prices, contrary to the disguise hypothesis. We do, however, find evidence of exaggeration of the discount, which may potentially explain why prices fall after discounts, although the evidence is not sufficiently widespread for this to be the sole cause. Results parallel the competition authority's view of supermarket promotions and point to the useful contribution that retail price microdata might play in keeping prices in check in countries where highly concentrated retail sectors raise similar concerns.
AB - Using a sample comprising nearly 250,000 weekly prices from the largest seven UK supermarket chains, this note investigates two pricing practices that have attracted public interest: the tendency for promotions to 'disguise' rises in non-sale prices and the inflation of prices prior to sales which 'exaggerate' the discount. Analysing price dynamics before and after periods of promotional discounting results show post-sale prices are typically lower than pre-sale prices, contrary to the disguise hypothesis. We do, however, find evidence of exaggeration of the discount, which may potentially explain why prices fall after discounts, although the evidence is not sufficiently widespread for this to be the sole cause. Results parallel the competition authority's view of supermarket promotions and point to the useful contribution that retail price microdata might play in keeping prices in check in countries where highly concentrated retail sectors raise similar concerns.
KW - Food prices
KW - Supermarket promotion
UR - http://www.scopus.com/inward/record.url?scp=84928210651&partnerID=8YFLogxK
U2 - 10.1111/1477-9552.12096
DO - 10.1111/1477-9552.12096
M3 - Article
AN - SCOPUS:84928210651
SN - 0021-857X
VL - 66
SP - 555
EP - 562
JO - Journal of Agricultural Economics
JF - Journal of Agricultural Economics
IS - 2
ER -