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Does Shelf-Labeling of Organic Foods Increase Sales? Results from a Natural Experiment

Author

Listed:
  • Daunfeldt, Sven-Olov

    (The Ratio Institute and Dalarna University)

  • Rudholm, Niklas

    (The Swedish Retail Institute (HUI) and Dalarna University)

Abstract

Can a simple point-of-purchase (POP) shelf-label increase sales of organic foods? We use a random-effects, random-coefficients model, including a time adjustment variable, to test data from a natural experiment in a hypermarket in Gävle, Sweden. Our model incorporates both product specific heterogeneity in the effects of labeling and consumer adjustment to the labels over time. The introduction of POP displays was found to lead to an increase in sales of organic coffee and olive oil, but a reduction in sales of organic flour. All targeted products became less price-sensitive. The results reveal that product specific heterogeneity has to be accounted for, and in some cases consumers adjusted to labeling over time.

Suggested Citation

  • Daunfeldt, Sven-Olov & Rudholm, Niklas, 2010. "Does Shelf-Labeling of Organic Foods Increase Sales? Results from a Natural Experiment," Ratio Working Papers 152, The Ratio Institute.
    • Handle: RePEc:hhs:ratioi:0152
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    Cited by:

    1. is not listed on IDEAS
    2. Magdalena Śmiglak-Krajewska & Julia Wojciechowska-Solis, 2021. "Consumer versus Organic Products in the COVID-19 Pandemic: Opportunities and Barriers to Market Development," Energies, MDPI, vol. 14(17), pages 1-22, September.
    3. Jessica Aschemann-Witzel & Stephan Zielke, 2017. "Can't Buy Me Green? A Review of Consumer Perceptions of and Behavior Toward the Price of Organic Food," Journal of Consumer Affairs, Wiley Blackwell, vol. 51(1), pages 211-251, March.
    4. Lindgren, Charlie, 2021. "Discontinuities: What is the value of having the lowest price or highest consumer rating on a price comparison website?," HFI Working Papers 19, Institute of Retail Economics (Handelns Forskningsinstitut).
    5. Yadav, Rambalak, 2016. "Altruistic or egoistic: Which value promotes organic food consumption among young consumers? A study in the context of a developing nation," Journal of Retailing and Consumer Services, Elsevier, vol. 33(C), pages 92-97.
    6. repec:ehu:cuader:30010 is not listed on IDEAS

    More about this item

    Keywords

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    JEL classification:

    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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