Prices tend to be sticky. So businesses will be slow to lower prices when simply spending more on marketing has a higher yield. But they’ll also be wary of inflicting sticker shock and scaring their customers away.
When the wholesale rate of groceries rises or the costs fall, it’s easy to take profits universally. But it’s harder to raise prices absent backroom coordination.
Prices tend to be sticky. So businesses will be slow to lower prices when simply spending more on marketing has a higher yield. But they’ll also be wary of inflicting sticker shock and scaring their customers away.
When the wholesale rate of groceries rises or the costs fall, it’s easy to take profits universally. But it’s harder to raise prices absent backroom coordination.