In the News
Did the pandemic lead to fewer customer discounts in stores?
13th June 2020
This is a fascinating article about the nature of pricing goods and services during the pandemic, with implications for inflation too.
Grocery prices rose by 2.4% in a month at the beginning of the #coronavirus lockdown, fuelled by a fall in promotions.
— IFS (@TheIFS) June 12, 2020
IFS researchers, funded by @NuffieldFound, highlight unprecedented month-to-month inflation for groceries: https://t.co/rhr2BCo5z2 pic.twitter.com/kuJMRWjPYe
However, a great piece of research by the Institute for Fiscal Studies has discovered that the number of promotions run during the first month of the pandemic was 15% lower than might have been expected, leading the price of groceries to rise by 2.4% in a month, a rate more in keeping with the annual rate of price increases.
Now, call me cynical but supermarkets will have known that significant increases in goods where there were shortages, such as toilet roll, would have been seen as price gouging and offended the moral code that governs market transactions, so the lack of promotions is a cunning way of achieving the same effect.
Paul Johnson from the IFS has tweeted about this research - shown below.
There was a 15% fall in the frequency of promotions during first month of lockdown, Institute for Fiscal Studies research finds https://t.co/tAI4KTyG1o
— BBC News (UK) (@BBCNews) June 12, 2020
Slightly buried by GDP news but look at new @theifs analysis showing grocery prices rose by 2.4% in one month when lockdown occurred. Also unprecedented as lines for previous years show. Based on over 13 million transactions using scanner data https://t.co/q5N26qYRZx pic.twitter.com/zfnU0ksayC
— Paul Johnson (@PJTheEconomist) June 12, 2020
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