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The distributive trade sector and its impact on euro area prices

Listed author(s):
  • D. Cornille

    (National Bank of Belgium, Research Department)

  • J. Langohr

    (National Bank of Belgium, Research Department)

Registered author(s):

    At a time of a consolidation and an increasing internationalisation of the distributive trade sector, three major phenomena have been simultaneously altering the structure of euro area trade for several years now : the success of hard discounters, the emergence of private-label products, and the growth in online shopping. All three tend to exert downward pressure on price levels. Whereas the first two factors are particularly pronounced in Belgium, online shopping is less of a factor. There have been no significant competition anomalies uncovered in the sector in Belgium. Retailers are not particularly concentrated at either the local or national level. And yet, despite improvements in recent years, Belgian regulation of the sector remains very invasive and could discourage the opening of new points of sale. Given the impact of the distributive trade sector’s structural characteristics on price-setting behaviour, and the differences in price levels within each country and between euro area countries, structural reforms are needed to enhance competition and take better advantage of the common market. However, even though harmonising regulations and eliminating implicit barriers should help lessen differences within the euro area, some differences are unavoidable due to consumer preferences and cultural differences from one country to the next, and even regionally.

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    Article provided by National Bank of Belgium in its journal Economic Review.

    Volume (Year): (2011)
    Issue (Month): iii (December)
    Pages: 35-52

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    Handle: RePEc:nbb:ecrart:y:2011:m:december:i:iii:p:35-52
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    1. V. Baugnet & D. Cornille & E. Dhyne & B. Robert, 2009. "Regulation and competition in the distribution sector in Belgium," Economic Review, National Bank of Belgium, issue iii, pages 33-57, September.
    2. John S. Greenlees & Robert McClelland, 2008. "New Evidence on Outlet Substitution Effects in Consumer Price Index Data," Working Papers 421, U.S. Bureau of Labor Statistics.
    3. Sims, Christopher A., 2003. "Implications of rational inattention," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 665-690, April.
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