James Binkley (email@example.com) is a Professor of Agricultural Economics at Purdue University.
Prices Paid in Grocery Markets: Searching Across Stores and Brands
Article first published online: 4 OCT 2013
Copyright 2013 by The American Council on Consumer Interests
Journal of Consumer Affairs
Volume 47, Issue 3, pages 465–484, Fall 2013
How to Cite
BINKLEY, J. (2013), Prices Paid in Grocery Markets: Searching Across Stores and Brands. Journal of Consumer Affairs, 47: 465–484. doi: 10.1111/joca.12016
- Issue published online: 18 NOV 2013
- Article first published online: 4 OCT 2013
- Manuscript Accepted: 7 MAY 2013
- Manuscript Revised: 13 MAR 2013
- Manuscript Received: 7 DEC 2012
Using a large sample of prices paid for 21 homogeneous grocery products available in several brands in each of 16 markets, we simulate the search behavior of a consumer following different shopping strategies using as many as four supermarkets. We find that price search can lead to substantial savings. Brand switching can generate savings at least as large as visiting multiple stores to find the lowest price for a single brand. Buying a private label is usually a better way to save than any amount of search for low prices on national brands. A case study in a small metropolitan area grocery market yields results substantially the same as the simulation results.