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Rebalancing the Market Power. Manufacturer and Retailer Brands in the German Food Retail Market

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  • Bielig Andreas

    (World Economy Research Institute, Warsaw School of Economics, Poland)

Abstract

The German food retail market is considered to be one of the most competitive markets worldwide. A narrow oligopoly of domestic retail chains dominates competition at the national and regional levels, driven mostly by price competition and extensive market coverage. As a result, market entrance for potential newcomers is highly restricted, even for such global players like Wal-Mart, which retreated in 2006 after nine years of substantial financial losses in Germany. There have been discernable attempts by the domestic incumbents to rebalance the traditional “task division”, affecting the range of customers choices as well as retail brands. However, within ten years the share of large retailers brands earnings in the total food retail market increased from 21.8 percent to 38.8 percent in 2012, as “house brands” optimized their assortment, increased their independence from main suppliers and squeezed out competitors. The empirical analysis presented below describes the role played by different retail brands in German food retail market as measured by their market power, and considers its political implications.

Suggested Citation

  • Bielig Andreas, 2015. "Rebalancing the Market Power. Manufacturer and Retailer Brands in the German Food Retail Market," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 48(1), pages 21-44, December.
    • Handle: RePEc:vrs:ijomae:v:48:y:2015:i:1:p:21-44:n:2
    DOI: 10.1515/ijme-2015-0033
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    References listed on IDEAS

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    More about this item

    Keywords

    manufacturer brands; retailer brands; market structure; market power; food retail;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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