Competition Effects of Supermarket Services

Alessandro Bonanno () and Rigoberto Lopez
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Alessandro Bonanno: University of Connecticut

No 94, 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 article investigates the competition effects of supermarket food and non-food services using fluid milk as a case study. A simultaneous equation model for services and price competition is estimated with scanner data from 16 supermarket chains operating in six U.S. cities. Empirical results show that a greater scope of services results in higher retail cost, greater supermarket chain-level demand but lower price elasticity, and enhanced market power, all leading to higher milk prices and quantity of milk sold. However, unlike previous research, we conclude that increases in cost rather than market power explain most of the ensuing price increases.

Keywords: retailing; service; pricing; milk; market power; competition (search for similar items in EconPapers)
JEL-codes: D40 L66 L81 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2007-11
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Related works:
Journal Article: Competition Effects of Supermarket Services (2007)
Working Paper: Competition Effects of Supermarket Services (2007)
Working Paper: Competition Effects of Supermarket Services (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:zwi:fpcrep:094

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