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The purpose of this paper is to present a new model to empirically analyze retail pricing dynamics led by the competition between retailers, using fluid milk markets of three US metropolitan areas as a case study. The research is important for Chinese public policy makers to find the reasons of retail price fluctuations and provides policy makers with the direction and rationale to intervene in retailing markets.

This paper empirically applies dynamic oligopolistic competition model using Markov switching regression. The dataset used in this study includes 58 four‐week‐ending observations covering the period from March 1996 to July 2000 for three cities, Boston, Dallas, and Seattle.

The empirical results illustrate the Markov switching regression not only successfully identifies the Markov perfect equilibrium in each market, but decomposes the retail price series into the corresponding equilibrium regimes. The forecasting power of the model is surprising so it can serve as a price monitor of the government. Additionally, the model reveals the different consumer welfare implications given different price regimes. The welfare analysis shows that consumers are most likely to be worse off through price fluctuations, while they are not always better off through a sticky (stable) price series in a market.

The first limitation of the paper is the retail price data is four‐week ending. If a cycle evolves faster within four weeks, the model would overestimate the duration and underestimate the amplitude of cycles. So the study serves as an upper bound of the reality. The second limitation is the number of regimes. More than three regimes studied in a Markov switching regression may cause a series of empirical issues. However, if we integrate several regimes into one regime, we will lose rich information about the competitiveness of the markets.

This paper is the first work to apply the dynamic pricing analysis to food industry by using fluid milk market as a case study. This paper empirically identifies four retail pricing regimes in fluid milk price series and evaluates the characteristics of the regimes.

This paper assesses the welfare implications of each pricing regime. The results show that the forecasting power of the model is strong in fluid milk retail market. Therefore, the study could serve as a price monitor to the public policymaker.

This paper presents the first study to apply dynamic oligopolistic competition model to food marketing research.

This paper aims to explore the applied context of grocery retail pricing practice to understand how pricing executives approach “regular price” decision-making (as opposed to promotional pricing). The study seeks to inductively develop a model of regular price decision-making in grocery retailing.

The research uses an inductive methodology involving interviews with pricing executives working for grocery retailers that account for approximately 85 per cent of the UK, and 64 per cent of USA, grocery market retail sales. The approach is appropriate given the underdeveloped research insights into regular pricing within food retailers.

It is found that regular pricing is undertaken with little sophistication, typically, on the basis of simple, inflexible rules that result in conflicting goals. A typology of three pricing roles was identified, although all share an underdeveloped understanding of the effects of price changes on customer demand and the implications of competitor reactions. These contexts, causes and conditions lead to a range of consequences; notably, a degree of pricing inertia, “customer-less” pricing and “enforced symbiosis” – coping outcomes. Taken together, a theory of “passivity” pricing is identified.

The research presents a contribution to new knowledge in the field of retail marketing by developing theory in retail pricing. In contrast to much extant research on grocery pricing, this paper accesses the insights and opinions of the pricing executives themselves. It exposes the realities of regular price decision-making across two developed retail markets and offers managerial insights.

The focus and intended contribution of this research are to understand better how retailers should strategically present external reference price information varying in the context from which it originates (online vs bricks and mortar).

A two reference price environment (online e‐tail, bricks‐and‐mortar retail) × two external reference price ($252.99, low; $379.99, high) between subjects experimental design with a single control condition was employed.

Results from an experimental study provide empirical support, suggesting that consumers expect to pay less in online e‐tail settings than bricks‐and‐mortar retail settings. Additionally, results suggest that bricks‐and‐mortar retail external reference prices influence consumer e‐tail price expectations, price fairness, and satisfaction perceptions more than online e‐tail external reference prices when reference prices are high. When external reference prices are low, both online e‐tail and bricks‐and‐mortar retail external reference prices are equally effective.

Price setters should use bricks‐and‐mortar external reference prices when the external reference price is high, as consumers are impacted positively by these reference prices.

The research results suggest a time to use bricks‐and‐mortar external reference prices and suggest that online external reference prices have similar impact regardless of the size of the external reference price.

This research is the first of its kind to evaluate the impact of the context of the reference price on consumer evaluations.

This study aims to investigate how narcissistic consumers perceive and respond to variations in price and store image in retail settings.

The data for this study were collected from a sample of 248 respondents who participated in an experiment with a 2 × 2 × 2 between-subjects design.

The findings show that while narcissists and non-narcissists do not differ in their perceptions of product quality, they show completely different behavioral intentions. For instance, narcissistic consumers ascribe more importance to store image than to product price, whereas price is more critical in non-narcissists’ decision-making.

Using a young sample and only one product category (i.e. clothing) may affect the generalization of the findings. The inherent drawback of experiments (i.e. gaining internal validity at the cost of external validity) is another limitation of this work.

The construct of narcissism plays a critical role in the way people evaluate products’ symbolic value and ultimately decide to purchase goods from a store which has a certain type of image, including the expected price of the merchandise. Therefore, the findings of this study have significant managerial implications for critical areas of retail business such as segmentation using narcissism, store image management and merchandise pricing.

Despite a long history in social and clinical psychology, few empirical studies have examined narcissism and its impact on consumer behavior. The present study is an attempt to address this gap in retail settings and provides insights into the joint effects of product price and store image on narcissists’ purchase behavior.

The purpose of this paper is to develop a theoretical model of price transmission from the farm to the retail sector, allowing not only for an interaction between oligopoly power, oligopsony power and non‐constant returns to scale in industry technology, but also allowing for the market power conduct parameters to vary in response to an industry‐wide exogenous shock. Also, the degree of price transmission under imperfect competition relative to that under perfect competition is evaluated.

Conjectural variations are used to parameterize both seller and buyer market power conduct of the industry and then the equilibrium displacement approach is applied to solve a system of six structural equations which describe the demand for and supply of industry retail output and farm and marketing inputs.

First, it is found that given empirical values of retail output demand elasticity, of farm and marketing inputs supply elasticities, of market power conducts, and of the returns to scale measure, the degree of price transmission under imperfect competition is greater than that under perfect competition. Second, it is found that the relative degree of price transmission under imperfect competition could be greater or smaller under the assumption of a varying market power conduct than one under the alternative assumption of a constant market power conduct, depending on whether market conduct is falling or rising, respectively.

The paper makes two original contributions to the literature. First, it allows for an interaction between oligopoly power, oligopsony power and industry technology. Second, it allows both oligopoly and oligopsony power parameters to vary in response to industry‐wide exogenous shocks.

The purpose of this paper is to better understand the unique competitive positioning characteristics of off-price retailers and how they compare to other types of retailers. The authors compare off-price and upscale off-price retailers with four major formats of retailers: first, discount department store/warehouse club retailers; second, moderate department store retailers; third, department store retailers; and finally, specialty department store retailers.

The paper employs a representative sample that was randomly drawn from four primary metropolitan cities in the USA. The data were collected using telephone interviews by a prominent, marketing research firm. A series of discriminant analyses were conducted to examine the data.

The findings of the paper indicate that the off-price formats were consistently positioned at extreme points along the price/value continuum, signifying the strongest value-orientation among the other retail formats. The authors also found that while the upscale off-price format followed the specialty department stores in terms of fashion. The results point to an important disadvantage of the off-price format – although strong on price/value, they often fall short on fashion and many other store attributes that may be important to luxury-oriented customers.

The paper employed a sample from several cities collected using a telephone interview methodology within the US. Due to these limitations, the findings of this paper may be hampered by this methodology and not generalize to regions outside of the US. Future research should examine how the demise of most of the upscale off-price retailers and growth of flash web sites have changed the competitive structure of retailing.

The results demonstrate that the positioning of the off-price retail format is unique from other formats. The retail formats occupy distinct positions. The off-price retail format is strongly associated with the price/value position but only moderately fashionable to customers, especially when compared with the department and specialty department store formats. In contrast, the upscale off-price format, while also strongly positioned along the price/value continuum, is considered much more fashionable than the off-price retail format. In fact, the upscale off-price retail format only trails the specialty department store format in terms of fashion.

The unique characteristics of the off-price retail format and growing interest from upscale department stores underscores the need for a comprehensive understanding of the motives of the off-price shopper. This paper provides retailers with a more complete understanding of the store attributes that differentiate the off-price retail format from other major retail store formats. The overall objective of this study is to offer a comprehensive view of the positioning of off-price retailers compared with many alternative retail formats.

Suggests that the study of marketing margins can provide a useful indication of the efficiency with which a food commodity is produced and distributed, or the extent to which weaknesses within a marketing system are producing undesirable effects on incomes of producers/distributers or on prices charged to consumers for the final product. Aims to determine, using frozen broilers as an example, the size of the gross marketing margins in Northern Ireland from 1975 to 1982. Proposes to identify the way in which margins have moved during this period. Determines the share of retail expenditure received by Northern Irish retailers and compares this with the share received by producers in Great Britain. Examines the extent to which observed prices and margins were related to the structural features of the marketing system. Reveals two broad conclusions: the Northern Irish market structure appears to have had important influences on pricing behaviour and ultimately marketing performance; and during the period studied marketing efficiency improved which reflected in price reductions.

The paper aims to form system dynamics modeling in introduced in conjunction with econometric analysis and planned scenario analysis which will uniquely structure the process whereby the ex ante capital values of the prime retail real estate sector.

The integrated system dynamics model investigates the structural factors affecting a unique expectation‐centered capital value (CV) formation of the prime retail real estate sector, through system dynamics modeling, econometric analysis , and the analysis of planned scenarios. This model extends beyond the usual lags and time line aspect of the price discovery process. The retail real estate sector is investigated within the Singapore context, as this sector changes dynamically and non‐linearly in relation to rental, cost and general demand expectations and to exogenous shocks like the Severe Advanced Respiratory Syndrome (SARS) outbreak. These macroeconomic factors are introduced to investigate their impact on retail space CVs through sensitivity analysis, during the simulation period of 20 quarters from the zero reference quarter (2Q2002).

The paper finds that simulation runs of the expectations‐centered system dynamics model are based on three scenarios. Sensitivity analysis is conducted for each scenario. Optimistic scenarios' CVs are lower than those of the likely scenario, owing to developers forming excessively high expectations that cannot be met by the actual rental levels. Pessimistic scenarios' CVs are highest. Based on bounded logic and the conditions for all scenarios, there are huge differences in expectations resulting in a large disparity in the endogenous CVs. Low actual rents are primarily due to poor informational efficiency, as the prime retail real estate sector is not transparent enough, and that many transactions are privately closed. Expectations cannot be met as the market information is not disseminated extensively through the agents and players. The scenarios clearly highlight the problem of informational non‐availability in the sector. The main policy implication is a need for a more transparent system of sharing rental and pricing information for the retail real estate sector, which is meaningful for real estate developers, investors and urban planners to sustain the retail real estate sector's viability.

This paper takes system dynamics modeling to the next level of incorporating econometric analysis, to estimate the sensitivity of retail rent to cost and the change in retail rent, for effectively structuring the dynamic process whereby the ex ante CVs of the prime retail sector in Singapore are formed and assessed, through a unique and rigorous expectations‐centered system dynamics model of rents, cost, retail stock, general demand and exogenous factors.

Despite the large interest in urban food markets, there are, however still relatively few good studies that have empirically documented the functioning of retail markets in developing countries, especially in Africa. The purpose of this paper is to look in particular at the case of Addis Ababa, a city of more than four million people and the capital of Ethiopia, one of the most populous countries in Sub-Saharan Africa. To better understand urban food retail, the authors rely on a large primary survey.

To better understand urban food retail, the authors rely on a large primary survey. Based on a stratified sampling scheme representative for the city as a whole, 1,226 urban food retail outlets were interviewed in March and April 2012.

The authors find increasing differentiation in food retail markets in recent years. Despite the prohibition of foreign direct investment in food retail, a domestic modern private retail sector is quickly emerging. However, its share is still very small and, in contrast to roll-outs of modern retail in other countries, it has not yet entered the cereal sector, which remains in the hands of local flour mills, cereal shops, and cooperative retail outlets. The importance of cooperative retail is growing even more rapidly. It is especially important for those products where supply chains are controlled by the government. On the high-end, domestic private modern retail outlets deliver high-quality products at significantly higher prices, ceteris paribus. At the other side, the authors see cooperative retail that delivers food at significantly lower – and subsidized – prices. However, the latter shops are characterized by typical price control problems, reflected in regular lack of supplies and queuing.

The study is limited to the city of Addis Ababa and it seems useful if similar studies could be conducted in other cities in Africa.

Despite the large interest in urban food markets, there are still relatively few good studies that have empirically documented the functioning of retail markets in developing countries, especially in Africa. The paper therefore contributes to fill this lacuna by studying urban food retail markets using new and unique data for Africa.

The purpose of the study is to examine the effect of consumer price attitudes, which operate as marketplace cues, on retail format choice across a variety of store types in the USA.

A cross‐section of US consumers (n=365) constitutes the sample for the study. The apparel category was selected as the study's context due to the variety of formats it offers to consumers. A telephone survey was used to investigate price perceptions and format choice across seven different retail formats. Respondents were grouped into high and low groups for each of the price cue factors. The groups were compared using analysis of variance (ANOVA) for each price construct at each level of the dependent variable for format choice.

Findings suggest that price cues affect consumer format choice. Price consciousness and sale proneness tend to positively impact patronage of retail formats that implement low cost strategies, while prestige sensitivity and price/quality schema tend to positively impact patronage of retail formats that implement higher price strategies.

As US retail markets continue to move toward saturation and consumers take advantage of price competition, understanding the role of price as a driver of retail choice is important for strategic planning. This is particularly important when communicating store pricing policy to the target consumer. The research extends previous price cue research, which focuses on products and brands, to the retail store level.