Private Label Price Rigidity during Holiday Periods
Mark E. Bergen
University of Minnesota - Carlson School of Management
University of Southern California - Marshall School of Business
Bar-Ilan University - Department of Economics; Emory University - Department of Economics; Rimini Center for Economic Analysis
February 14, 2005
Bar-Ilan University and Emory University Economics Working Paper No. 01-2005
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.
Number of Pages in PDF File: 12
Keywords: Price rigidity, holidays, private label, national brand, social consumption
JEL Classification: E12, E31, L11, L20, L16, M21, M31
Date posted: March 20, 2005
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