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Price rigidity, wholesale price passthrough, and quality‐tiered private labels

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  • Sven Anders
  • Richard Volpe
  • Thomas Bittmann

Abstract

Quality‐tiered private labels have become a main strategy for grocery retailers. However, impacts of private label development on wholesale prices and their effects on retail price rigidity remain unanswered as appropriate wholesale price data remain scarce. This paper fills this research gap by analyzing retail‐pricing behavior and wholesale passthrough for categories with quality‐tier differentiated private labels. We find the speed of wholesale passthrough to differ across categories, quality tier, and direction of adjustment. Overall, we find wholesale prices to play a secondary role to price promotions in explaining price rigidity across grocery categories with quality‐tiered private labels.

Suggested Citation

  • Sven Anders & Richard Volpe & Thomas Bittmann, 2023. "Price rigidity, wholesale price passthrough, and quality‐tiered private labels," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(6), pages 3002-3015, September.
    • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:6:p:3002-3015
    DOI: 10.1002/mde.3859
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