Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/303179 
Year of Publication: 
2024
Series/Report no.: 
Bank of Canada Staff Working Paper No. 2024-31
Publisher: 
Bank of Canada, Ottawa
Abstract: 
We study how within-store price variation changes with inflation, and whether households exploit it to attenuate the inflation burden. We use micro price data for food products sold by 91 large multi-channel retailers in 10 countries between 2018 and 2024. Measuring unit prices within narrowly defined product categories, we analyze two key sources of variation in prices within a store: temporary price discounts and differences across similar products. Price changes associated with discounts grew at a much lower average rate than regular prices, helping to mitigate the inflation burden. By contrast, cheapflation-a faster rise in prices of cheaper goods relative to prices of more expensive varieties of the same good-exacerbated it. Using Canadian Homescan Panel data, we estimate that spending on discounts reduced the change in the average unit price by 4.1 percentage points, but expenditure switching to cheaper brands raised it by 2.8 percentage points.
Subjects: 
Inflation and prices
Inflation: costs and benefits
Market structure and pricing
JEL: 
E21
E30
E31
L81
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.