Market Structure and Competition in Food Retail: Some Evidences from Brazil
AbstractThe paper analyzes competition among supermarkets in Brazil. In contrast to part of the economic literature which suggests that the fast growth of big supermarket chains would destroy independent, medium and small supermarkets, the paper argues that big supermarket chains can coexist with different formats of independent food retailing. As a result, competition in food retail is complex and cannot be described as a simple Darwinian process of market concentration. The analysis is divided in two parts. In the first part, the competition between hypermarkets and supermarkets is examined. Evidences for the district of Sao Paulo, Brazil, suggest that these retailers form separate markets. The second part is focused on neighborhood supermarkets. The results differ from the general belief that independent supermarkets establish higher prices in comparison to big chain supermarkets. The analysis brings to light the heterogeneity of the competitive fringe in the oligopoly model of Brazilian retailing.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 44199.
Date of creation: 2008
Date of revision:
Food retail; Supermarkets; Differentiation; Agribusiness; Industrial Organization;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-25 (All new papers)
- NEP-COM-2008-11-25 (Industrial Competition)
- NEP-CSE-2008-11-25 (Economics of Strategic Management)
- NEP-IND-2008-11-25 (Industrial Organization)
- NEP-MIC-2008-11-25 (Microeconomics)
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