Advanced Search
MyIDEAS: Login to save this article or follow this journal

Supermarkets: Price Competition

Contents:

Author Info

  • Alejandro Castañeda Sabido

    ()
    (Profesor-investigador, Centro de Estudios Económicos, El Colegio de México, y profesor-investigador visitante, CIDE. México, D.F. Mexico)

Registered author(s):

    Abstract

    By using a sample of 108 products across 118 supermarket stores, we study price competition among supermarkets. The study uses a modified version of the Staples dispute to define the estimation equations. We also include other statistical models to analyze price competition among supermarkets. The study does include three ways of measuring the relevant market. First, we define a geographic market in which all supermarkets included in a 5 kilometer radius are competing with the pivot store (the store that we have information on prices). This radius is valid for the three largest cities in Mexico (Mexico, Guadalajara and Monterrey). For the rest of the cities we consider a radius of 8 km. In a second approach we define two circles for all pivot stores in the country. In a first circle we include all stores within a 5 km distance from the pivot store. In a second circle we include all stores located between 5 and 8 kilometers from the pivot store. In a third approach we consider the municipality as the geographical market. We find that supermarket chains have different pricing policies that vary according to the number and identity of rivals. We also find that Walmart does not compete strongly in prices. In fact, in those markets in which the number of Walmart stores increases, the rivals tend to increase prices. We also find that stores fix lower prices whenever there are more chains in the relevant market.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.economiamexicana.cide.edu/num_anteriores/XXI-2/04.EM_AlejandroCastanedaSabido(297-349).pdf
    Download Restriction: no

    Bibliographic Info

    Article provided by in its journal Economia Mexicana NUEVA EPOCA.

    Volume (Year): XXI (2012)
    Issue (Month): 2 (July-December)
    Pages: 297-349

    as in new window
    Handle: RePEc:emc:ecomex:v:21:y:2012:i:2:p:297-349

    Contact details of provider:

    Related research

    Keywords: competition; prices; supermarkets.;

    Find related papers by JEL classification:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:emc:ecomex:v:21:y:2012:i:2:p:297-349. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ricardo Tiscareño).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.