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Price and promotion effects of supermarket mergers

David E. Davis ()

No 12009, SDSU Working Papers in Progress from South Dakota State University, Department of Economics

Abstract: I use a unique data set of retail food prices to analyze mergers between supermarket chains. The data allow for an examination of the effects of mergers on prices, the frequency of promotions, and the depth of promotions. I find that increases in a chain’s share of the total US food sales are associated with price decreases, suggesting that supermarkets enjoy economies of scale and/or benefit from an improved bargaining position relative to their suppliers after a merger. I also find that mergers are associated with decreases in the frequency and depth of price-promotions.

Keywords: Food prices; supermarket; merger; price discrimination (search for similar items in EconPapers)
JEL-codes: L11 L81 D4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-com, nep-ind and nep-mkt
Date: 2009-09, Revised 2010-06
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Published in Journal of Food and Agricultural Industrial Organization, Vol. 8 (2010) Prices, Promotions, and Supermarket Mergers

Downloads: (external link)
http://repec-sda.sdstate.edu/repec/sda/pdf/SupermarketmergersSept09.pdf First version, 2009 (application/pdf)
http://repec-sda.sdstate.edu/repec/sda/pdf/Supermarketmergers_June10.pdf Revised version, 2009 (application/pdf)
http://www.degruyter.com/view/j/jafio.2010.8.1/iss ... o.2010.8.issue-1.xml Journal download link (text/html)

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Persistent link: http://EconPapers.repec.org/RePEc:sda:workpa:12009

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