This is one of those ideas that I thought up myself but was later to find out that others had thought of it before me. Furthermore, there are fairly good counterarguments except when you are talking about a small town with few retailers. Still, I thought it was worth posting because it is a good illustration of something where your instantaneous reaction (“this policy is good for consumers”) could lead you astray. Something you should guard against.
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That was much truer before the e-commerce explosion, especially in locations with limited selection. The Business Journals describes the thinking behind price matching on this article:
Use price matching to stand out from competitors – The Business Journals (bizjournals.com)