The Pricing Strategies of Online Grocery Retailers

Matched product data is collected from the leading online grocers in U.S. The same exact products are identified scanner data. paper documents pricing strategies within and across (and offline) retailers. First, retailers exhibit substantially less uniform than offline Second, price differentiation competing chains narrow geographies higher Third, variation elasticities, shipping distance, frequency, local demo- graphics utilized to explain differentiation. Surprisingly, technology (across time) magnifies locations). This evidence motivates a high-frequency study unpack patterns of algorithmic pricing. shows that algorithms: personalize prices at delivery zipcode level, update very frequently tiny magnitudes, reduce synchronization, lower menu costs, constantly explore grid, often match competitors’ prices.