THE BEHAVIOR OF GERMAN ONLINE PRICES FOR FOOD AND BEVERAGES ON THE AMAZON WEB PAGE IN THE PERIOD 2020-2022 – A CASE STUDY

Abstract

The study investigates whether online price (inflation) indices during and shortly after the Covid 19 period (January 2020- December 2022) differ from prices in brick-and-mortar shops, respectively from the official inflation index. The research concerns Germany and food and beverage prices, with online prices web-scraped from Amazon.de. These prices are driven by the company's market share and competition on the site, serving as a representative of the whole German online customer shopping market. The study constructed several online indices and compared their development with the official German inflation index for the investigated category. Online inflation rates were expected to be higher than the official ones during the investigated period, due to restricted supply and a shift in demand to the online environment. However, we found that all measured online rates are significantly below the rate reported by the German statistical office. The results also show that competition on Amazon´s website is more dynamic than in brick-and-mortar shops and affects online prices. Our findings emphasize that both theoretical and practical inflation measurement should pay closer attention to online prices. Otherwise, the measurement is biased and does not give adequate information. Previous research indicates that online inflation rates are lower than official ones, mainly in "good times" when an economy is not hit by a negative supply shock. The article shows that lower online rates can occur even during these shocks.