Pricing strategies of food retailers

Stephen F. Hamilton, Jura Liaukonyte, Timothy J. Richards

Research output: Contribution to journalReview articlepeer-review

1 Scopus citations

Abstract

Studies examining pricing outcomes in the food retail industry are complicated both by the multiproduct nature of transactions and by the presence of highly concentrated food processing and retailing industries that mediate between relatively competitive farm product markets and the consumer market. In this review, we examine theoretical and empirical evidence for retail pricing and the vertical relationships that have emerged among retailers, food manufacturers, and farmers. We first focus our analysis on consumer behavior in multiproduct retail markets, including consumer search, habit formation, and reference pricing, and then discuss retail market outcomes for price discrimination, price fairness, and price obfuscation. We then turn to relationships between retailers and food manufacturers through bargaining outcomes, market foreclosure, and slotting allowances, and discuss the resulting implications for retail-price pass-through.

Original languageEnglish (US)
Pages (from-to)87-110
Number of pages24
JournalAnnual Review of Resource Economics
Volume12
DOIs
StatePublished - Oct 6 2020

Keywords

  • Food retailing
  • Industrial organization
  • Pricing strategy
  • Retailing
  • Vertical relationships

ASJC Scopus subject areas

  • Economics and Econometrics

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