Price Setting in a Leading Swiss Online Supermarket
We study a newly released data set of scanner prices for food products in a large Swiss online supermarket. We find that average prices change about every two months, but when we exclude temporary sales, prices are extremely sticky, changing on average once every three years. Non-sale price behavior is broadly consistent with menu cost models of sticky prices. When we focus specifically on the behavior of sale prices, however, we find that the characteristics of price adjustment seems to be substantially at odds with standard theory.
Devereux thanks SSHRC, the Royal Bank, and the Bank of Canada for financial support. The views in this paper are those of the authors alone and do not represent the views of the Bank of Canada or the National Bureau of Economic Research.