Abstract:
Price promotions are often seen as a “necessary evil”: while their costly practice may generate short-term sales spikes, their long-term effectiveness has long been scrutinized. However, brand manufacturers are reluctant to unilaterally abandon price promotions, out of fear of competitive repercussions. As such, a retailing world without price promotions long remained an improbable yet intriguing proposition. In this study, we exploit a formal ban on price promotions that encompassed an entire retail market, to investigate which brands truly stand to gain from a world devoid of price promotions. Specifically, we consider how various brand characteristics related to prior promotional intensity, price positioning, branding, and line length determine who ultimately reigns supreme, and who is left in shambles when promotions are absent. Our analyses reveal that the effect of the price promotion ban on brand performance substantially differs between brands: while brands typically boasting deep discounts are worse off, private label brands triumph over their national brand competitors. Moreover, brands with a longer line length gain more; an effect that is even more pronounced in hedonic categories. Finally, category sales remain unaffected by the ban, indicating that price promotions merely shift market share among brands.

Abstract:
While shrinkflation – the strategy of downsizing product packages to covertly increase prices – is a common practice in the grocery sector nowadays, its sales effects remain poorly understood. Using scanner data covering 388 shrinkflation cases across 4,762 stores and 62 product categories, we show that shrinkflation leads to increased unit, volume, and value sales. However, its effectiveness varies depending on the way it is implemented, the characteristics of the brand, and the nature of the product category. The size of the volume reduction emerges as the most important driver of effectiveness, with smaller reductions leading to stronger sales. In addition, shrinkflation performs particularly well when implemented by national brands with broader size assortments and in expensive categories that have previously exposed consumers to similar tactics. While shrinkflation offers brands an effective tool to protect profit margins, it raises ethical concerns by enabling hidden price increases.

Abstract:
This research article investigates the phenomenon of panic buying, where a crisis or disaster spurs consumers to accumulate goods at home. While prior literature has shed light on the psychological motives of panic buying, little is known about how this behavior manifests itself in consumers’ purchase decisions and who engages in it. Drawing from the promotion-induced stockpiling literature, i.e., a related form of inventory accumulation, a Type II Tobit regression model disentangles purchase incidence from purchase quantity and explores consumer heterogeneity in panic buying. The results show that panic buying translates into consumers buying sooner but in smaller quantities than usual. Moreover, the authors demonstrate that, while panic buying behavior is a widespread behavior, certain consumer profiles respond more heavily. These insights offer practical implications for managing panic buying behavior in times of crisis.

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