THE TIMING AND MAGNITUDE OF RETAIL STORE MARKDOWNS - EVIDENCE FROM WEEKENDS AND HOLIDAYS

We examine daily prices of eight goods at seventeen retail stores collected in Ann Arbor, Michigan, over a four-month period from November 1 to February 28. We focus on weekly and seasonal price patterns, and on the frequency of price markdowns or ''sales.'' There were frequent markdowns in the intensive shopping period prior to Christmas, and a tendency for such sales to occur on weekends. We interpret these findings as evidence that a significant number of markdowns are timed to occur when shopping intensity is exogeneously high. We complement the imperfect information-based motives for sales in the literature by contributing an additional element based on the role of bulk shopping and increasing returns in the shopping technology.