Are food price promotions predictable? The hazard function of supermarket discounts

Hao Lan, Tim Lloyd, Wyn Morgan, Paul W. Dobson

Research output: Contribution to journalArticlepeer-review

Abstract

Is the timing of food products going on sale, in the form of temporary price reductions, random or predictable? More specifically, are products more likely to go on sale the longer they remain non-promoted? We investigate the nature and timing of sales discounts using a large database based on weekly supermarket scanner prices covering 500 products for 137 weeks in the largest seven national retail chains in the UK. Our duration analysis of regular price spells reveals that discounting for a wide range of food products is more likely the longer they remain without a sale. However, critical differences exist between retailers following Hi-Lo or every-day-low-pricing (EDLP) policies, while the time-dependent pattern varies considerably across product categories, brand status, and discount depth.
Original languageEnglish
Pages (from-to)64-85
Number of pages12
JournalJournal of Agricultural Economics
Volume73
Issue number1
Early online date9 Jul 2021
DOIs
Publication statusE-pub ahead of print - 9 Jul 2021

Keywords

  • PRICE PROMOTIONS
  • supermarket prices
  • discounting
  • SALES
  • Hazard function
  • Food prices
  • Price competition
  • hazard function
  • pricing policies
  • supermarkets
  • sales

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