Abstract: We are interested in the extent to which quality-tier differentiation of private label (PL) contributes to explaining their greater price regidity during holiday periods, when social consumption motives may influence retailer category management.

After controlling for wholesale cost pass-through, product and store effects, we find social consumption theory to provide the best explanation for greater PL price regidity during the Christmas period. Although this effect does not extend to other periods of peak demand or across product categories, our results underscore the importance of consumer considerations in firm-level price setting discussed by Blinder et al. (1998). More generally, this article emphasizes the growing improtance of quality-tier differentiated PLs in retailer´s pricing and promotional strategies.

(Anders, S. and Beye, M. 2015. Social Consumption and Price Regidity of Quality-tier Differentiated Private Labels. Applied Economics Letters, www.tandfonline.com)