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Private label price rigidity during holiday periods

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  • Georg Muller
  • Mark Bergen
  • Shantanu Dutta
  • Daniel Levy

Abstract

Using weekly retail transaction scanner price data from a large US supermarket chain, significantly higher retail price rigidity is found for private label products than for nationally branded products during the Christmas and Thanksgiving holiday periods relative to the rest of the year. The finding cannot be explained by changes in holiday period promotional practices because it is found that private label promotions appear to diminish at least as much as national brands. The increased rigidity of private label products relative to national brands is only partially accounted for by increased rigidity of wholesale prices. After ruling out other potential explanations, it is suggested that the higher private label price rigidity might be due to the increased emphasis on social consumption during holiday periods, raising the customers' value of nationally branded products relative to the private labels.

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Bibliographic Info

Article provided by Taylor and Francis Journals in its journal Applied Economics Letters.

Volume (Year): 13 (2006)
Issue (Month): 1 ()
Pages: 57-62

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Handle: RePEc:taf:apeclt:v:13:y:2006:i:1:p:57-62

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References

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  1. Basu, Susanto, 1995. "Intermediate Goods and Business Cycles: Implications for Productivity and Welfare," American Economic Review, American Economic Association, vol. 85(3), pages 512-31, June.
  2. Shantanu Dutta & Mark Bergen & Daniel Levy, 2002. "Price Flexibility in Channels of Distribution: Evidence from Scanner Data," Working Papers 2002-10, Department of Economics, Bar-Ilan University.
  3. Caplin, A., 1992. "Individual Inertia and Aggregate Dynamics," Discussion Papers 1992_16, Columbia University, Department of Economics.
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Cited by:
  1. Daniel Levy & Georg Müller & Haipeng (Allan) Chen & Mark Bergen & Shantanu Dutta, 2009. "Holiday Price Rigidity and Cost of Price Adjustment," Working Papers 2009-03, Department of Economics, Bar-Ilan University.
  2. Daniel Levy, 2006. "Price Rigidity and Flexibility: New Empirical Evidence," Emory Economics 0611, Department of Economics, Emory University (Atlanta).
  3. Georg Muller & Mark Bergen & Shantanu Dutta & Daniel Levy, 2006. "Holiday Non-Price Rigidity and Cost of Adjustment," Working Papers 2006-4, Department of Economics, Bar-Ilan University.
  4. Georg Müller & Mark Bergen & Shantanu Dutta & Daniel Levy, 2007. "Non-price rigidity and cost of adjustment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 817-832.

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