Do people really go comparison shop between stores? Like, I recognize that I'm coming from a more privileged economic position to not do so, but I still go to the cheap grocery store because it's the closest to me.
I'd imagine that even for low-income people, it's the cost/benefit of comparison shopping has been squeezed out by how much prices change on a day-to-day basis. Like sure, if you're buying a lot of something all at once it might make sense to do on that occasion, but once you do that a few times you either learn:
1. Which store usually has the lowest price (and if they have coupons for store X, they might just only go there, because... they can't use the coupon at the competitor's)
2. The difference in price doesn't offset the time-cost of going to multiple stores (and the consolidation of stores means that going to two different stores will take even more travel time).
So, if most people aren't really doing comparison shopping anyway, then you make more money by matching your prices to your competition.
Some people do, based on what I hear from my parents. It could be that seniors have more free time and are more astounded by higher food prices that the spend their time shopping at multiple supermarkets to get everything they want at low(er) cost.
Of course the time it takes to do this makes it all but impossible to actually save money, so it has to be a small portion of their customers.
I have heard that only something like 10% of customers actually give a shit about prices at all, and it is them who keep the prices in check for everyone else. i.e. with razor margins, the retailers can’t afford to lose that 10% customer base
Why are stores changing prices so frequently if it has no impact on sales?
Yes, the vast majority of people don't comparison shop. But people do decide to not buy something if it seems it is too expensive and vice versa, and the effects are seen on the statistical level.
I'd imagine that even for low-income people, it's the cost/benefit of comparison shopping has been squeezed out by how much prices change on a day-to-day basis. Like sure, if you're buying a lot of something all at once it might make sense to do on that occasion, but once you do that a few times you either learn:
1. Which store usually has the lowest price (and if they have coupons for store X, they might just only go there, because... they can't use the coupon at the competitor's)
2. The difference in price doesn't offset the time-cost of going to multiple stores (and the consolidation of stores means that going to two different stores will take even more travel time).
So, if most people aren't really doing comparison shopping anyway, then you make more money by matching your prices to your competition.