Granger causality networks of price leadership in the retail tea market of Argentina

Abstract

Recently, price leadership in supermarkets has become a subject of extensive research. In our study, we utilize the Generalized Seaton–Waterson (GSW) method, but with a unique approach based on Granger causality networks. As it naturally captures statistically significant price variation sequences, the multiple interactions observed by a network present dimensions hardly observed when studying pairwise relations. Our investigation centers on retail tea product data from three stores in Argentina. The results highlight numerous significant leader–follower relationships, primarily associated with Black tea options and brand interactions. We distinguish two main brands in the market as segment leaders. This insight sheds light on the dynamics of price leadership within the retail tea market and provides valuable information for market participants and researchers alike.