Spatial Competition in the French Supermarket Industry
This paper challenges the conventional wisdom of a competitive grocery retail sector in France. To measure the intensity of competition in this sector, 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. Retail competition in the French supermarket industry appears to be highly localized in that margins are very sensitive to the presence of a competitor within a few kilometers. Finally, I perform counterfactual experiments to quantify the expected gain of an additional store on consumer welfare and retail prices,
Volume (Year): (2016)
Issue (Month): 121-122 ()
|Contact details of provider:|| Postal: 3, avenue Pierre Larousse, 92245 Malakoff Cedex|
Web page: https://annals.ensae.fr/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Peter Davis, 2006. "Spatial competition in retail markets: movie theaters," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 964-982, December.
- Michael A. Cohen & Ronald W. Cotterill, 2011.
"Assessing The Impact Of Retailer Store Brand Presence On Manufacturer Brands In An Equilibrium Framework,"
Journal of Industrial Economics,
Wiley Blackwell, vol. 59(3), pages 372-395, 09.
- Cohen, Michael & Cotterill, Ronald, 2009. "Assessing the Impact of Retailer Store Brand Presence on Manufacturer Brands in an Equilibrium Framework," Research Reports 149959, University of Connecticut, Food Marketing Policy Center.
- Michael Cohen & Ronald W. Cotterill, 2009. "Assessing the Impact of Retailer Store Brand Presence on Manufacturer Brands in an Equilibrium Framework," Food Marketing Policy Center Research Reports 119, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
- Allain, Marie-Laure & Chambolle, Claire, 2011. "Anti-competitive effects of resale-below-cost laws," International Journal of Industrial Organization, Elsevier, vol. 29(4), pages 373-385, July.
- Marie-Laure Allain & Claire Chambolle, 2007. "Anti-Competitive Effects of Resale-Below-Cost Laws," Working Papers 2007-29, Centre de Recherche en Economie et Statistique.
- Marie-Laure Allain & Claire Chambolle, 2011. "Anti-Competitive Effects of resale-Below-Cost Laws," Post-Print hal-00367492, HAL.
- Paul B. Ellickson & Sanjog Misra, 2008. "Supermarket Pricing Strategies," Marketing Science, INFORMS, vol. 27(5), pages 811-828, 09-10.
- Ellickson, Paul & Misra, Sanjog, 2006. "Supermarket Pricing Strategies," Working Papers 06-02, Duke University, Department of Economics.
- Timothy J. Richards & Stephen F. Hamilton, 2006. "Rivalry in Price and Variety among Supermarket Retailers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(3), pages 710-726.
- Barros, Pedro Pita & Brito, Duarte & de Lucena, Diogo, 2006. "Mergers in the food retailing sector: An empirical investigation," European Economic Review, Elsevier, vol. 50(2), pages 447-468, February.
- Joris Pinkse & Margaret E. Slade & Craig Brett, 2002. "Spatial Price Competition: A Semiparametric Approach," Econometrica, Econometric Society, vol. 70(3), pages 1111-1153, May.
- Asplund, Marcus & Friberg, Richard, 2002. " Food Prices and Market Structure in Sweden," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(4), pages 547-566, December.
- Dubois, Pierre & Jodar-Rosell, Sandra, 2010. "Price and Brand Competition between Differentiated Retailers: A Structural Econometric Model," IDEI Working Papers 604, Institut d'Économie Industrielle (IDEI), Toulouse.
- Dubois, Pierre & Jodar-Rosell, Sandra, 2010. "Price and Brand Competition between Differentiated Retailers: A Structural Econometric Model," TSE Working Papers 10-159, Toulouse School of Economics (TSE).
- Dubois, Pierre & Jodar Rosell, Sandra, 2010. "Price and Brand Competition between Differentiated Retailers: A Structural Econometric Model," CEPR Discussion Papers 7847, C.E.P.R. Discussion Papers.