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Retailers’ strategies and food price dynamics: Evidence from dairy scanner data

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  • Castellari, Elena
  • Moro, Daniele
  • Platoni, Silvia
  • Sckokai, Paolo

Abstract

We investigate the relationship between retailers’ strategies and dairy price dynamics. Using high frequency Italian scanner data for different dairy products, we compute a weekly drift-free price index, specific for product category, chain, and type of store. Exploiting the (unbalanced) panel data structure to control for unobservable strategies by chain, time, and type of store, we test if unobservables are statistically significant in influencing the price dynamics of each of the products covered by our analysis. In general chain and type-of-store specific unobservables play a significant role. Moreover, we identify the role of some observable strategic variables in controlling or in stimulating price inflation rates. We obtain mixed results on the relationship between Private Label (PL) market shares and price trend, while we find price promotions to be more effective if applied to National Brands (NBs) rather than PLs. We conclude with some implications for the potential role of public policies in controlling food inflation.

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  • Castellari, Elena & Moro, Daniele & Platoni, Silvia & Sckokai, Paolo, 2018. "Retailers’ strategies and food price dynamics: Evidence from dairy scanner data," Food Policy, Elsevier, vol. 74(C), pages 212-224.
    • Handle: RePEc:eee:jfpoli:v:74:y:2018:i:c:p:212-224
    DOI: 10.1016/j.foodpol.2017.12.005
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    2. Piotr Borawski & Aneta Beldycka-Borawska & Adam Pawlewicz & Jayson K. Harper & Bogdan Klepacki & Agnieszka Brelik & Ireneusz Zuchowski, 2020. "Impact of New Member Accession to the European Union on Food Trade," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 149-159.
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    More about this item

    Keywords

    Food price dynamics; GEKS index; Retail strategies; Error Component Model;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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