Spatial competition in the French supermarket industry

Stéphane Turolla

No 12-01, Working Papers SMART from INRAE UMR SMART

Abstract: This paper challenges the conventional wisdom on the competitive grocery retail sector in France. To that end, I develop a structural model of spatial competition that accounts for (i) market geography on consumers' preferences, and (ii) differences in their shopping list. The demand estimates are used to recover stores' price-cost margin under alternative pricing strategies. I select the best pricing model by applying non-nested tests and show that retailers noticeably distort their offer in highly concentrated markets. Finally, I perform counterfactual experiments to quantify the expected gain of an additional store on consumer welfare and retail prices.

Keywords: spatial competition; structural model; discrete choice model; differentiated products; supermarket industry (search for similar items in EconPapers)
JEL-codes: C35 L13 L81 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2012
New Economics Papers: this item is included in nep-agr, nep-bec, nep-com, nep-geo, nep-ind and nep-ure
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Citations: View citations in EconPapers (11)

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http://ageconsearch.umn.edu/bitstream/207984/2/WP%20SMART-LERECO%2012-01.pdf (application/pdf)

Related works:
Journal Article: Spatial Competition in the French Supermarket Industry (2016)
Working Paper: Spatial competition in the French supermarket industry (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:rae:wpaper:201201

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