Sales and Firm Entry: The Case of Wal-Mart

Philip Glandon and Matthew Jaremski

No 2012-03, Working Papers from Department of Economics, Colgate University

Abstract: Temporary price reductions or "sales" have become increasingly important in the evolution of the price level. We present a model of repeated price competition to illustrate how entry causes incumbents to alternate between high and low prices. Using a six year panel of weekly observations from a grocery chain, we find that individual stores employ more sales as the distance to Wal-Mart falls. Moreover, the increase in the frequency of sales was concentrated on the most popular products, suggesting the use of a loss-leader strategy.

Keywords: Wal-Mart; Retail Prices; Price Competition; Temporary Sales Prices (search for similar items in EconPapers)
JEL-codes: E30 L11 L13 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-agr, nep-bec, nep-com and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://digitalcollections.colgate.edu/islandora/object/islandora%253A4713 (application/pdf)

Related works:
Journal Article: Sales and Firm Entry: The Case of Wal‐Mart (2014)
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:cgt:wpaper:2012-03

Access Statistics for this paper

More papers in Working Papers from Department of Economics, Colgate University Contact information at EDIRC.
Bibliographic data for series maintained by Chad Sparber ().