Modelling the effect of store flyers on supermarket sales: An application to olive oil demand. (May 2020)

• Record Type: Journal Article
• Authors: Boto-García, David; Alvarez, Antonio
• Is Part Of: Journal of retailing and consumer services. Volume 54(2020)
• Publication Date: 2020-05
• Subjects: Store flyers -- Promotions -- Dynamic model -- Supermarkets -- Panel data -- Olive oil; Retail trade -- Periodicals; Service industries -- Periodicals; Customer services -- Periodicals; Commerce de détail -- Périodiques; Service à la clientèle -- Périodiques; Customer services; Retail trade; Periodicals; 658.87
• DOI: 10.1016/j.jretconser.2020.102057
• Languages: English
• ISSNs: 0969-6989

Abstract

Abstract: In this paper we study the effect of store flyers on supermarket sales while controlling for other promotional strategies. We use a dataset of weekly sales of 16 olive oil products from a Spanish supermarket chain during the year 2017. We estimate a dynamic panel data model by GMM which allows us to examine both the short- and long-run effects of displaying products in store flyers. Our estimates show that products being featured in a store flyer exhibit 85 percent higher sales in the short-run, being the effect in the long-run of 109 percent. We also provide evidence that olive oil is a highly price-elastic product. Our estimates also indicate that placing the products on the end-of-aisle increases olive oil sales. Conversely, multibuy promotions are negatively related with sales.