What are the drivers of retailer pricing tactics over time? Based on multivariate time-series analysis of two rich data sets we quantify the relative importance of competitive retailer prices, past pricing history, brand demand, wholesale price, and retailer category-management considerations as dynamic drivers of retail prices. Interestingly, competitive retailer prices account for less than 10% of the over-time variation in retail prices. Instead, pricing history, wholesale price, and brand

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... mand are the main dynamic drivers of retail-price variation over time. Moreover, the influence of these price drivers on retailer pricing tactics is linked to retailer category margin. We find that demand-based pricing and category-management considerations are associated with higher retailer margins. In contrast, dependence on past pricing history and pricing based on store traffic considerations imply lower retailer margins.