Do Sales Matter? Evidence from UK Food Retailing
AbstractThis paper assesses the role of sales as a feature of price dynamics using scanner data. The study analyses a unique, high frequency panel of supermarket prices consisting of over 230,000 weekly price observations on around 500 products in 15 categories of food stocked by the UK’s seven largest retail chains. In all, 1,700 weekly time series are available at the barcode-specific level including branded and own-label products. The data allows the frequency, magnitude and duration of sales to be analysed in greater detail than has hitherto been possible with UK data. The main results are: (i) sales are a key feature of aggregate price variation with around 40 per cent of price variation being accounted for by sales once price differences for each UPC level across the major retailers are accounted for; (ii) much of the price variation that is observed in the UK food retailing sector is accounted for by price differences between retailers; (iii) only a small proportion of price variation that is observed in UK food retailing is common across the major retailers suggesting that cost shocks originating at the manufacturing level is not one of the main sources of price variation in the UK; (iv) own-label products also exhibit considerable sales behaviour though this is less important than sales for branded goods; and (v) there is some evidence of coordination in the timing of sales across retailers insofar as the probability of a sale at the UPC level at a given retailer increases if the product is also on sale at another retailer.
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Bibliographic InfoPaper provided by Agricultural Economics Society in its series 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK with number 108774.
Date of creation: Apr 2011
Date of revision:
Sales; price variation; retail; Consumer/Household Economics; Demand and Price Analysis; L16; L66; Q13.;
Find related papers by JEL classification:
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-08-15 (Agricultural Economics)
- NEP-ALL-2011-08-15 (All new papers)
- NEP-BEC-2011-08-15 (Business Economics)
- NEP-MKT-2011-08-15 (Marketing)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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