1. Scanner Data – Discussion on the Treatment of Discounts in the CPI Muhanad Sammar, Anders Norberg & Can Tongur Statistics Sweden

2. Disposition Scanner Data in the Swedish CPI The Swedish Practice A New System Data file Different Rebates and Discounts Regulations & Guidelines Future plans

3. The Price Unit’s Current Position Scanner data in the CPI One major retail chain (Approx 50%) - Daily necessities Pharmacies (Total data) The government owned chain of alcohol stores (Total data) Studying scanner data from Two more retail chains (Approx 35%) A major railway operator Secure scanner data from Petrol stations Hardware stores Electrical retailers

4. The Swedish Practice 1 - Manual price collection (observed prices) Store A 1 Store A 2 Store A n Price collector B 1 Item 3Item 2Item iItem 4Item 1 Price collector B 2 Price collector B m

5. The Swedish Practice 2 - Transaction prices (weekly deliveries) Store A 1 Store A 2 Store A n Item 3Item 2Item iItem 4Item 1 Population C 1 Population C 2 Population C n

6. A complete system has been built File validation File structure Translate variables' name Ensure the quality Selecting – fixed basket Price validation Limits Market analysis Aggregation Unweighted geometric mean Weighted arithmetic mean

7. Why the Price Unit went to Use Scanner Data in the CPI? Better quality Less volatile data (three weeks) “A study on Scanner Data in the Swedish CPI” A report by Swedish Consumer Agency For 9% of the items in the survey, the prices were hard to find or could not be found at all. For 6% of the examined products, the prices on the shelves and packages were different from the purchased prices. Human errors

8. Scanner Data - Variables Excel sheet Transaction prices (=Turnover/Units Sold) EAN codes (bar codes) Detailed information Product description Week/Year Store Quantity Brand

9. Different Rebates and Discounts Member card discounts Bonus offers (extras) like “3 for 2” Sale Coupon discounts

10. Member Card Discounts “Membership” offers are for the moment a steadily growing marketing strategy premium checks membership discounts offers on travel, hotels and various entertainments. For one of the retail chains, 80% of all their sales, registered in 2011, were made by members. The two major chains have millions of households tied to them through membership cards which are used actively

11. Bonus Offers (extras) - like “3 for 2” Example 1: Same product - $30 off Example 2: Different products - $30 off (split proportionally) $$$

12. Coupon discounts Issued by the seller or the supplier (in paper) Accepted as any payment Issued by the seller or the supplier (Membership card)

13. Regulations & Guidelines The review of the Swedish Consumer Price Index (SOU 1999:124) HICP regulations Consumer price index manual: Theory and practice (The International CPI Manual) National Accounts manual

14. Price Unit's aspiration Secure more scanner data Introduce more scanner data into the CPI Introduce 5 digit level COICOP (year 2014) Enhance international cooperation Exchange knowledge and expertise on scanner data and on quality management

15. Summing-up New method of collecting prices Update guidelines Update regulations A promising source of data High quality of actual transactions An issue of principle: Should rebates and discounts in the Scanner Data be included or excluded in the target price for the CPI?