Abstract
The 9-ending prices, which comprise between 40% and 95% of retail prices, are popular because shoppers perceive them as being low. We study whether this belief is justified using scanner price-data with more than 98-million observations from a large US grocery chain. We find that 9-ending prices are higher than non-9-ending prices, by as much as 18%. Two factors explain why shoppers believe, mistakenly, that 9-ending prices are low. First, we find that among sale prices, 9-ending prices are indeed lower than non-9-ending prices, giving 9-ending prices an aura of being low. Second, 9-ending prices were indeed lower than other prices. Shoppers therefore learned to associate 9-endings with low prices. Over time, however, 9-ending prices rose substantially, which shoppers failed to notice, because the continuous use of 9-ending prices for promoting deep price cuts draws shoppers’ attention to them and helps to maintain and preserve the image of 9-ending prices as bargain prices.
Original language | English |
---|---|
Pages (from-to) | 33-47 |
Number of pages | 15 |
Journal | Journal of the Association for Consumer Research |
Volume | 6 |
Issue number | 1 |
DOIs | |
State | Published - Jan 2021 |
Bibliographical note
Publisher Copyright:© 2020 the Association for Consumer Research. All rights reserved.