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The effect of consumer stockpiling and product perishability on long run grocery shopping behavior

Authors Krider, Robert E.
Weinberg, Charles B.
Issue Date 1996-08
Summary We present a dynamic, normative, theoretical model of consumers as cost minimizing inventory managers, who choose between two stores differentiated on location and price, and who purchase two goods differentiated by perishability. We derive optimal shopping patterns and subsequent market shares. Perishability, a largely unconsidered characteristic of consumer goods, is shown to play an important role in planned shopping behavior. Stockpiling decisions are critical for consumers who are trying to minimize their grocery and shopping costs. Furthermore, the interaction between perishability and price differences offers a novel rationale for planned multistore shopping. The model also results in a convex "increasing returns" relation between price advantage and market share. We present survey results supporting the model predictions.
Language English
Format Working paper
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