Who Bears the Brunt of Disruptive Innovation? The Effect of Grocery E‐Commerce on Local Retail Competitors
Brian Y. An and
Jamie Chung
Journal of Regional Science, 2025, vol. 65, issue 3, 843-865
Abstract:
The rising prominence of e‐commerce has raised concerns regarding its potential threat to local businesses. However, existing literature lacks substantial empirical evidence of the impact of e‐retailers due to its ambiguous service areas. Our study aims to address this gap by focusing on e‐grocery giants Amazon Fresh and Instacart to examine their influences on local brick‐and‐mortar businesses within the grocery retail industry. We leverage e‐grocery's clearly defined service areas at the zip code level to employ a difference‐in‐difference approach with longitudinal establishment‐level records from the National Establishment Times Series (NETS) database in the greater Atlanta metropolitan area. We find that retail competitors experience an annual decline in sales following Amazon Fresh's entry into the local market. In response, these retailers partially adjust operations, reducing their headcount. Notably, the negative impacts disproportionately affect small businesses, and the effects are spatially widespread, irrespective of proximity to major retail clusters anchored by big‐box stores. Over time, the presence and continuous operations of Amazon Fresh that offers both sales and delivery of goods exert a heavier burden on local retail stores. In contrast, we do not find such evidence of disruptive effects for Instacart, which is increasingly becoming a dominant grocery e‐commerce model in partnership with local store chains over independent operations.
Date: 2025
References: Add references at CitEc
Citations:
Downloads: (external link)
https://doi.org/10.1111/jors.12765
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:bla:jregsc:v:65:y:2025:i:3:p:843-865
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0022-4146
Access Statistics for this article
Journal of Regional Science is currently edited by Marlon G. Boarnet, Matthew Kahn and Mark D. Partridge
More articles in Journal of Regional Science from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().