Price rigidity in food retail sector: the retailers’ strategy for pasta

Abstract

In the Italian agro-food industry pasta represents a strategic product since Italy has the peculiarity of being, at the same time, the main producer and consumer of pasta. In the last years, Italian food retailing, as in all developed countries, has experienced some developments. This work, which represents a preliminary study on the Italian pasta market, focuses on how national and private label brands are positioned in the different segments of the Italian pasta markets. A way to reach such goal is to investigate on retail price and price promotions in Italy and 4 Italian macro-regional areas. The average prices show that at the national level different market segments exist with three national brands positioned at the highest level, following by an intermediate segment in which we find brand leader (Barilla) which competes with private label brands. The private labels products, which present a regular price lower than national brands, are sold without promotions. the frequency of price promotions concerns mainly the brands positioned in the higher market segment and the market leader. Finally, there is a moderate there is a relevant degree of heterogeneity in the results across the selected regional areas.