Abstract

The purpose of this study is to investigate empirically the major determinants of the supermarket manager’s decision rule for placing products on promotions. Specifically, I examine the roles of substitutes and close complements as well as the potential interaction between national brands and private labels in determining promotional timing. The results expand upon the literature by demonstrating that complementary considerations, both within stores and among competitors, are highly significant determinants of promotional timing. Additionally, the results indicate that private labels are promoted heavily and that retailers incorporate the promotional timing of private labels when setting national brand promotions. This study provides further evidence that retail sales pricing typically does not conform to theoretical models of pricing.

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