Entry of Wal-Mart Supercenters and Supermarkets’ Profit Margins

Xiaoou Liu and Rigoberto Lopez

No 148291, Working Paper series from University of Connecticut, Charles J. Zwick Center for Food and Resource Policy

Abstract: This article quantifies the impact of Wal-Mart Supercenters on supermarkets’ profitability via a two-stage dynamic entry game, using method of simulated moments and milk scanner data from Dallas/Fort Worth supermarkets. The empirical findings show that the entry of Wal-Mart Supercenters accounts for about an average 50% decrease in milk profit margins for incumbent supermarkets. Effects of scale are found to be more significant for Wal-Mart Supercenters than for incumbent supermarkets, granting Wal-Mart a competitive edge.

Keywords: Community/Rural/Urban; Development (search for similar items in EconPapers)
Pages: 29
Date: 2011-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://ageconsearch.umn.edu/record/148291/files/wp3.pdf (application/pdf)

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:ags:ucozwp:148291

DOI: 10.22004/ag.econ.148291

Access Statistics for this paper

More papers in Working Paper series from University of Connecticut, Charles J. Zwick Center for Food and Resource Policy Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().