The Making of Australia's Supermarket Duopoly, 1958–2000

David T. Merrett

Australian Economic History Review, 2020, vol. 60, issue 3, 301-321

Abstract: Australian supermarkets had one of the highest levels of concentration among developed economies by 2000. This paper explores the making of a duopoly comprising Coles and Woolworths. We present historical data on market shares in Australia and international comparisons for around 2000. We identify the evolution of their dynamic capabilities through the lens of Teece, Pisano and Shuen's positions, paths and processes (1997). The industrial organisation literature stresses interaction become rivals, notably pre‐emptive strategies including sunk costs (Lee and Ng 2007; Sutton 1991). We argue that the development of dynamic capabilities enabled the execution of various pre‐emptive strategies.

Date: 2020
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