IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v17y2001i3p417-422.html

Slotting allowances and price-cost margins: A note

Author

Listed:
  • Azzeddine M. Azzam;

    (103 Filley Hall, Department of Agricultural Economics,, University of Nebraska-Lincoln, Lincoln, NE 68583-0922., E-mail: aazzam1@unl.edu)

Abstract

It has become common practice for retail grocers to charge grocery manufacturers a slotting allowance for placing products on the retail shelf. Manufacturers view the allowance as anti-competitive. Retailers view it as compensation for the risks associated with stocking new products. The largely theoretical literature on the subject is consistent with both views. This article proposes an empirical model to test the effect of slotting allowances on performance, and discusses if and how the model can be tied to the qualitative predictions of existing theoretical literature. [JEL classification: L100, L140, L420] © 2001 John Wiley & Sons, Inc.

Suggested Citation

  • Azzeddine M. Azzam;, 2001. "Slotting allowances and price-cost margins: A note," Agribusiness, John Wiley & Sons, Ltd., vol. 17(3), pages 417-422.
    • Handle: RePEc:wly:agribz:v:17:y:2001:i:3:p:417-422
    DOI: 10.1002/agr.1025
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/agr.1025
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.1025?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lukacs, Peter, 1997. "Input contracts, market structure and the empirical specification of price cost margins," Economics Letters, Elsevier, vol. 55(1), pages 139-143, August.
    2. Greg Shaffer, 1991. "Slotting Allowances and Resale Price Maintenance: A Comparison of Facilitating Practices," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 120-135, Spring.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rennhoff, Adam D., 2004. "Paying For Shelf Space: An Investigation Of Merchandising Allowances In The Grocery Industry," Research Reports 25155, University of Connecticut, Food Marketing Policy Center.
    2. Herrmann, Roland & Moser, Anke & Werner, Elke, 2002. "Neue empirische Befunde zur Preissetzung und zum Verbraucherverhalten im Lebensmitteleinzelhandel," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 51(02), pages 1-13.
    3. Ian Sheldon & Richard Sperling, 2003. "Estimating the Extent of Imperfect Competition in the Food Industry: What Have We Learned?," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 89-109, March.
    4. Geng, Qin & Minutolo, Marcel C., 2010. "Failure fee under stochastic demand and information asymmetry," International Journal of Production Economics, Elsevier, vol. 128(1), pages 269-279, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daniel Herold, 2017. "Information Exchange in Retail Markets with Uncertainty about Downstream Costs," MAGKS Papers on Economics 201750, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Foros, Øystein & Kind, Hans Jarle & Shaffer, Greg, 2011. "Resale price maintenance and restrictions on dominant firm and industry-wide adoption," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 179-186, March.
    3. Greg Shaffer, 1994. "Rendering Alternative Offerings Less Profitable with Resale Price Maintenance," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(4), pages 639-662, December.
    4. Robert Clark & Ignatius Horstmann & Jean-François Houde, 2021. "Hub and Spoke Cartels: Theory and Evidence from the Grocery Industry," NBER Working Papers 29253, National Bureau of Economic Research, Inc.
    5. Ingene, Charles A. & Parry, Mark E. & Xu, Zibin, 2020. "Resale Price Maintenance: Customer Service Without Free Riding," Journal of Retailing, Elsevier, vol. 96(4), pages 563-577.
    6. Cole, Matthew T. & Eckel, Carsten, 2018. "Tariffs and markups in retailing," Journal of International Economics, Elsevier, vol. 113(C), pages 139-153.
    7. John Asker & Heski Bar-Isaac, 2012. "Vertical Practices Facilitating Exclusion," Working Papers 12-20, New York University, Leonard N. Stern School of Business, Department of Economics.
    8. Roman Inderst & Greg Shaffer, 2010. "Market‐share contracts as facilitating practices," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 709-729, December.
    9. Staahl Gabrielsen, Tommy & Johansen, Bjørn Olav & Shaffer, Greg, 2018. "When is Double Marginalization a Problem?," Working Papers in Economics 7/18, University of Bergen, Department of Economics.
    10. Robert Innes & Stephen F. Hamilton, 2009. "Vertical restraints and horizontal control," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 120-143, March.
    11. Frago Kourandi & Ioannis N. Pinopoulos, 2024. "Vertical contracting between a vertically integrated firm and a downstream rival," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(1), pages 181-217, August.
    12. Sreya Kolay & Greg Shaffer, 2022. "Slotting Fees and Price Discrimination in Retail Channels," Marketing Science, INFORMS, vol. 41(6), pages 1145-1162, November.
    13. Tenn, Steven & Yun, John M., 2008. "Biases in demand analysis due to variation in retail distribution," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 984-997, July.
    14. Caprice, Stéphane, 2004. "Fidélité à la marque, fidélité à l'enseigne: une analyse des déterminants des rapports de force entre producteurs et distributeurs," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 283.
    15. Innes, Robert & Hamilton, Stephen F., 2006. "Naked slotting fees for vertical control of multi-product retail markets," International Journal of Industrial Organization, Elsevier, vol. 24(2), pages 303-318, March.
    16. Frank Mathewson & Ralph Winter, 1998. "The Law and Economics of Resale Price Maintenance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 13(1), pages 57-84, April.
    17. Heywood, John S. & Wang, Shiqiang & Ye, Guangliang, 2018. "Resale price maintenance and spatial price discrimination," International Journal of Industrial Organization, Elsevier, vol. 57(C), pages 147-174.
    18. Raff, Horst & Schmitt, Nicolas, 2009. "Buyer power in international markets," Journal of International Economics, Elsevier, vol. 79(2), pages 222-229, November.
    19. Jay Pil Choi & Christodoulos Stefanadis, 2018. "Sequential innovation, naked exclusion, and upfront lump-sum payments," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(4), pages 891-915, June.
    20. Peter Lukacs, 2000. "A decomposition of price-cost margins in UK manufacturing," Applied Economics Letters, Taylor & Francis Journals, vol. 7(10), pages 681-686.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:17:y:2001:i:3:p:417-422. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.