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Growth by acquisition and the performance of large food retailers

Author

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  • Bruce Bjornson

    (University of Missouri, 125-B Mumford Hall, Columbia, MO 65211-6200. E-mail: BjornsonB@missouri.edu)

  • Michael E. Sykuta

    (University of Missouri, 143-B Mumford Hall, Columbia, MO 65211-6200. E-mail: SykutaM@missouri.edu)

Abstract

The latter 1990s witnessed rapid growth among the largest retail food chain companies, much of it through acquisitions. An explanatory motive is that grocery chains could achieve greater scale economies and operating efficiencies, and increase their bargaining power with packaged food manufacturer-suppliers. This article begins to examine whether the largest retailers are realizing the promised financial rewards associated with this growth trend. We examine the performance of the three largest U.S. food retailers, Albertson's, Inc., The Kroger Company, and Safeway Inc., over 7 fiscal years beginning in calendar year 1993 and ending in fiscal year 1999, a period that covers the recent increase in acquisition activity. Overall, we find only modest evidence that the financial returns to the rapid growth strategies of the three largest food retailers have begun to be realized through fiscal year 1999. [EconLit citations: G390, G340, Q130] © 2002 Wiley Periodicals, Inc.

Suggested Citation

  • Bruce Bjornson & Michael E. Sykuta, 2002. "Growth by acquisition and the performance of large food retailers," Agribusiness, John Wiley & Sons, Ltd., vol. 18(3), pages 263-281.
    • Handle: RePEc:wly:agribz:v:18:y:2002:i:3:p:263-281
    DOI: 10.1002/agr.10024
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    References listed on IDEAS

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    Cited by:

    1. Connor, John M., 2003. "The Changing Structure Of Global Food Markets: Dimensions, Effects, And Policy Implications," Staff Papers 28675, Purdue University, Department of Agricultural Economics.
    2. Zhang, Yuehua & Rao, Xudong & Wang, H. Holly, 2019. "Organization, technology and management innovations through acquisition in China’s pork value chains: The case of the Smithfield acquisition by Shuanghui," Food Policy, Elsevier, vol. 83(C), pages 337-345.
    3. Martinez, Stephen W., 2007. "The U.S. Food Marketing System: Recent Developments, 1997-2006," Economic Research Report 55962, United States Department of Agriculture, Economic Research Service.

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