An Empirical Investigation of Wal-Mart’s Expansion into Food Retailing

Alessandro Bonanno ()
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Alessandro Bonanno: University of Connecticut

No 105, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: This paper analyzes Wal-Mart’s expansion into food retailing, focusing on its store conversion strategy via a formal IO entry framework. Forty-eight different competing model specifications are considered to determine how the company perceives competition from incumbent food retailers and how its geographic expansion pattern has influenced its store differentiation decisions over time. The results show that Supercenter openings mainly have targeted large areas with low population density and a high percentage of population receiving food stamps. The results also suggest that as the company moves toward geographic saturation of local markets, some of the strategic location decisions creating economies of density may need to be reconsidered in future years.

Keywords: http://fmpc.uconn.edu/publications/rr/rr105.pdf (search for similar items in EconPapers)
JEL-codes: L29 L81 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2008-04
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