Grocery price setting in times of high inflation: what webscraped data tell us

Christian Beer (), Robert Ferstl, Bernhard Graf () and Fabio Rumler
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Christian Beer: Oesterreichische Nationalbank, Economic Analysis Division

Monetary Policy & the Economy, 2023, issue Q4/22-Q1/23, 43-54

Abstract: We complement the existing literature on price rigidity by calculating statistics on the frequency and size of retail price changes observed in Austria between January 2021 and August 2022, using data scraped from online shop websites. As inflation started going up in September 2021, we split our sample into two parts: January to August 2021 and September 2021 to August 2022. Moreover, we limit our analysis to grocery items, since online supermarkets are a comprehensive and reliable source of daily prices. Our preliminary findings suggest that prices changed significantly more often in the period from September 2021 onward, with about 2.6% of all food prices being adjusted on a given day when we include sale price changes (compared to 1.5% in the period before September 2021). When we exclude sale price changes, we arrive at a daily price change rate of 0.5% (versus 0.2% in the low-inflation period). This corresponds to an average price duration of 38 days including sale price changes (versus 67 days in the low-inflation period) and approximately 200 days excluding sale price changes (versus 500 days before September 2021). While the considerably higher frequency of price changes in the high-inflation period under review affected all product groups observed, the average size of price changes remained broadly stable over time. Hence, we conclude that the current high level of food price inflation is driven mainly by an increase in the frequency of price changes rather than by changes in size. This might indicate that, in the face of a large shock, the frequency of price changes is no longer constant over time – as found in previous periods – but varies with the state of the economy. In other words, it would follow that time-dependent price setting has been replaced by state-dependent price setting.

Keywords: price setting; price rigidity; webscraping; online prices; inflation (search for similar items in EconPapers)
JEL-codes: C82 D22 E31 (search for similar items in EconPapers)
Date: 2023
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