This study analyzes Wal-Martâs pricing practices and its inï¬uence on competitorsâ input cost transmission. Previous attempts to analyze Wal-Martâs pricing strategy in the United States have been limited by the companyâs refusal to provide scanner data to third party research ï¬rms such as AC Nielsen. This is the ï¬rst study to observe Wal-Martâs prices over an extended period of time. Using weekly-store level price data between 2001 and 2006 that government oï¬cials collected in 12 Mexican cities, I ï¬nd that Wal-Mart adjusts its prices 1/3-3 times slower to wholesale price increases than other retailers and responds 5-7 times faster to wholesale price decreases than its competitors. This evidence is robust to the comparison of Wal-Mart to other hypermarkets that oï¬er âevery day low pricesâ and to potential endogeneity of Wal-Martâs location choices. All retailers respond asymmetrically to wholesale cost changes. However, retailers other than Wal-Mart respond twice as fast to wholesale price increases than to decreases, while Wal-Mart behaves in the opposite way. I ï¬nd no evidence that proximity to a Wal-Mart supercenter or the level of competition aï¬ects the speed of price adjustment of retailers.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Length: Date of creation: 2009 Date of revision: Handle: RePEc:ags:aaea09:49459
Contact details of provider: Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202 Phone: (414) 918-3190 Fax: (414) 276-3349 Email: Web page: http://www.aaea.org More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (AgEcon Search).