Competition Effects of Supermarket Services
AbstractThis article investigates the competition effects of supermarket services using fluid milk as a case study. A simultaneous equation model for services and price competition is estimated with scanner data from fifteen supermarket chains using two alternative measures of services, namely store size and principal components of in-store services. Empirical results show that increasing services results in economies of scope, greater supermarket chain-level demand, lower price elasticity of demand, and enhanced market power, leading to higher milk prices and quantity sold. We conclude that, as result of service competition, supermarkets differentiate themselves from competitors and successfully attract less price-sensitive consumers. Copyright 2007, Oxford University Press.
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Bibliographic InfoArticle provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.
Volume (Year): 91 (2007)
Issue (Month): 3 ()
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Other versions of this item:
- Bonanno, Alessandro & Lopez, Rigoberto A., 2007. "Competition Effects of Supermarket Services," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9833, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Bonanno, Alessandro & Lopez, Rigoberto, 2007. "Competition Effects of Supermarket Services," Research Reports 149176, University of Connecticut, Food Marketing Policy Center.
- Alessandro Bonanno & Rigoberto A. Lopez, 2007. "Competition Effects of Supermarket Services," Food Marketing Policy Center Research Reports 094, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
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