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The term comes from the fact that more walking is required (historically, although the rise of the internet has reduced it) and thus wearing out their shoes. This cost is known as shoe leather costs.
2. Menu Costs
Costs of price adjustment are called menu costs (Gans et al, 2005, p.654). Inflation increases the menu costs that firms must bear. In the current Australia economy, with its low inflation rate, annual price adjustment is an appropriate business strategy for many businesses. But when high inflation makes firms’ costs raise rapidly, annual price adjustment is impractical. During hyperinflations, for example, firms must change their prices daily or even more often just to keep up will all the other prices in the economy...
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