Retail price dynamics and retailer heterogeneity: UK evidence

- We analyse 230,000 food prices obtained from barcode scanners in UK supermarkets.
- We propose new methods to determine underlying reference prices.
- For the sample as a whole, the implied duration of reference prices is 14 weeks.
- There is considerable retailer heterogeneity in the duration of reference prices.
- Decomposing price dynamics shows there is wide variation across retailers.

We examine retailer heterogeneity in price adjustment in UK supermarkets. Considerable variation in the price change frequency of identically bar-coded products among retail chains is found. Decomposition analysis suggests that price adjustment is evenly split between sales and reference prices with substantive variation across retailers.