>Your math around pricing is wrong Well I doubt that. From a business perspective pricing is what you can get so you're saying OP is using the wrong model. Bu

>Your math around pricing is wrong Well I doubt that. From a business perspective pricing is what you can get so you're saying OP is using the wrong model. But using the "what the market will bear model" you would need to use a rate of inflation that reflects nominal growth in dispospal income of the customer segment with the lowest disposable income. Then go a little further becuase the size of that demographic may have changed and changed shape. Estimate the demand curve, the elasticity of demand then maximise revenue in the short term Alienate your biggest customer base at your peril, as always. Short term revenue maximization is not necessarily long-term revenue maximization and is frequently at odds with such. So yes the original naieve application of cpi to retail price leaves something to be desired.