NEW INSIGHTS INTO SUPERMARKET PROMOTIONS VIA SCANNER DATA ANALYSIS: THE CASE OF MILK

Abstract

Supermarket companies expend significant resources and employ many promotional activities so as to convince consumers to shop their stores. This analysis investigates the promotional activities of a single retail food company to determine the price and promotion responsiveness of fluid milk products that differ by milkfat content. It utilizes weekly, store-level scanner data. Seasonality and advertising are significant determinants of retail sales of fluid milk. Own-price elasticities are negative, and cross-price elasticities are positive for all milk types and are significant and elastic in the case of 2% milk. Advertising effects are positive and statistically significant. The response to advertising is much more pronounced for reduced-fat milk types than it is for whole milk.

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