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The Determinants of Price Adjustments in Retail Supermarkets

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  • Richard Volpe
  • Corey Risch
  • Michael Boland

Abstract

This paper examines the determinants of price adjustment decisions by supermarkets to increase or decrease prices for 11 different food categories and evaluates the characteristics of these firms that influence these decisions. We use a unique dataset to analyze firm variables and industry variables and their impact on price adjustment in supermarket stores. The study contributes to the price adjustment literature by identifying determinants of price behavior by stores and product category. We find that the rationale for increasing prices differs from that for decreasing prices, retailers make different adjustment decisions based on product category, and market‐level controls have little impact. Copyright © 2015 John Wiley & Sons, Ltd.

Suggested Citation

  • Richard Volpe & Corey Risch & Michael Boland, 2017. "The Determinants of Price Adjustments in Retail Supermarkets," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 38(1), pages 37-52, January.
  • Handle: RePEc:wly:mgtdec:v:38:y:2017:i:1:p:37-52
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    Cited by:

    1. Thomas Hutzschenreuter & S. Alexander Borchers & Philippa‐Luisa Harhoff, 2021. "Competitors matter: How competitors' actions moderate the influence of firm profitability on the prioritization between growth and efficiency increase," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(2), pages 326-342, March.
    2. Imsu Park & Ilyoung Jung & Jeonghoon Choi, 2020. "Market competition and pricing strategies in retail supply chains," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(8), pages 1528-1538, December.
    3. César Salazar & Andrés Acuña‐Duarte & José Maria Gil, 2023. "Drought shocks and price adjustments in local food markets in Chile: Do product quality and marketing channel matter?," Agricultural Economics, International Association of Agricultural Economists, vol. 54(3), pages 349-363, May.

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