Using a sample comprising nearly a quarter of a million weekly prices from the largest
seven supermarket chains in the UK, we present statistical evidence on two pricing practices
that have attracted public interest. Analysing price dynamics before and after periods of
promotional discounting the investigation finds first, no evidence of a general tendency for
sales to disguise rises in the regular price, and second, some evidence for prices to rise prior
to sales in a manner that is consistent with the exaggeration of the discount. As such, the
results parallel the competition authority’s view of supermarkets use of promotions and also
point to the useful contribution that retail price microdata might play in keeping prices in
check.
