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Private Label Price Rigidity during Holiday Periods

Author

Listed:
  • Georg Müller

    (Strategic Pricing Group)

  • Mark Bergen

    (University of Minnesota)

  • Shantanu Dutta

    (University of Sourthern California)

  • Daniel Levy

    (Bar-Ilan University)

Abstract

Using weekly retail transaction scanner price data from a large U.S supermarket chain, we find significantly higher retail price rigidity for private label products than for nationally branded products during the Christmas and Thanksgiving holiday periods relative to the rest of the year. The finding cannot be explained by changes in holiday period promotional practices because we find that private label promotions appear to diminish at least as much as national brands. The increased rigidity of private label products relative to national brands is only partially accounted for by increased rigidity of wholesale prices. After ruling out other potential explanations, we suggest that the higher private label price rigidity might be due to the increased emphasis on social consumption during holiday periods, raising the customers’ value of nationally branded products relative to the private labels.

Suggested Citation

  • Georg Müller & Mark Bergen & Shantanu Dutta & Daniel Levy, 2005. "Private Label Price Rigidity during Holiday Periods," Macroeconomics 0503006, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpma:0503006
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    References listed on IDEAS

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    Cited by:

    1. Levy, Daniel & Müller, Georg & Chen, Haipeng (Allan) & Bergen, Mark & Dutta, Shantanu, 2010. "Holiday Price Rigidity and Cost of Price Adjustment," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 172-198.
    2. Levy, Daniel, 2007. "Price Rigidity and Flexibility: New Empirical Evidence - Introduction to the Special Issue," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 639-647.
    3. Mark Bergen & Daniel Levy & Sourav Ray & Paul H. Rubin & Benjamin Zeliger, 2008. "When Little Things Mean a Lot: On the Inefficiency of Item-Pricing Laws," Journal of Law and Economics, University of Chicago Press, vol. 51(2), pages 209-250, May.
    4. Daniel Levy, 2007. "Price rigidity and flexibility: new empirical evidence," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 639-647.
    5. Müller, Georg & Bergen, Mark & Dutta, Shantanu & Levy, Daniel, 2007. "Holiday Non-Price Rigidity and Cost of Adjustment," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 817-832.
    6. Georg Müller & Mark Bergen & Shantanu Dutta & Daniel Levy, 2007. "Non-price rigidity and cost of adjustment," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 817-832.
    7. Laura Birg & Anna Goeddeke, 2016. "Christmas Economics—A Sleigh Ride," Economic Inquiry, Western Economic Association International, vol. 54(4), pages 1980-1984, October.
    8. Luca Cacchiarelli & Alessandro Sorrentino, 2019. "Pricing Strategies in the Italian Retail Sector: The Case of Pasta," Social Sciences, MDPI, Open Access Journal, vol. 8(4), pages 1-13, April.
    9. Sven Anders & Milena Beye, 2015. "Social consumption and price rigidity of quality-tier differentiated private labels," Applied Economics Letters, Taylor & Francis Journals, vol. 22(11), pages 911-915, July.

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    More about this item

    Keywords

    Price Rigidity; Holidays; Private Label; National Brand; Social Consumption;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • 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
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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