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Market Concentration, Market Shares, and Retail Food Prices: Evidence from the U.S. Women, Infants, and Children Program

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  • Meilin Ma
  • Tina L. Saitone
  • Richard J. Volpe
  • Richard J. Sexton
  • Michelle Saksena

Abstract

We explore pricing in local food‐retailing markets where supermarkets operate versus those occupied solely by smaller food retailers. Using data from the Women, Infants, and Children program in the Greater Los Angeles area, we show that supermarkets do not raise prices in local markets or as a function of market concentration or firm market shares. Smaller food retailers charge substantially higher prices on average than supermarkets. Their prices increase with market concentration and shares of sales, especially when small retailers face no direct competition from supermarkets. Given the dominance of small retailers in some low‐income areas, our findings have important implications regarding local market power, food costs, and supermarket entry.

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  • Meilin Ma & Tina L. Saitone & Richard J. Volpe & Richard J. Sexton & Michelle Saksena, 2019. "Market Concentration, Market Shares, and Retail Food Prices: Evidence from the U.S. Women, Infants, and Children Program," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 542-562, September.
    • Handle: RePEc:wly:apecpp:v:41:y:2019:i:3:p:542-562
    DOI: 10.1093/aepp/ppy016
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    Cited by:

    1. McLaughlin, Patrick W. & Saksena, Michelle & Saitone, Tina L. & Ma, Meilin & Volpe, Richard & Wu, Qi & Sexton, Richard J., 2021. "Cost Containment and Participant Access in USDA's Special Supplemental Nutrition Program for Women, Infants, and Children (WIC): Evidence from the Greater Los Angeles, CA, Area," USDA Miscellaneous 309614, United States Department of Agriculture.
    2. Xu, Fei & Liu, Qian & Zheng, Xingdong & Cao, Luqi & Yang, Mian, 2022. "Research on the impact of China's high-speed rail opening on enterprise market power: Based on the perspective of market segmentation," Transport Policy, Elsevier, vol. 128(C), pages 121-137.
    3. Zeballos, Eliana & Dong, Xiao & Islamaj, Ergys, 2023. "A Disaggregated View of Market Concentration in the Food Retail Industry," USDA Miscellaneous 333546, United States Department of Agriculture.
    4. McLaughlin, Patrick W & Saksena, Michelle & Saitone, Tina L & Ma, Meilin & Volpe, Richard & Wu, Qi & Sexton, Richard J, 2021. "Cost Containment and Participant Access in USDA's Special Supplemental Nutrition Program for Women, Infants, and Children (WIC): Evidence from the Greater Los Angeles, CA, Area," Economic Research Report 327202, United States Department of Agriculture, Economic Research Service.
    5. Saitone, Tina L & Li, Xuemei & McLaughlin, Patrick W & Sexton, Richard J, 2021. "Cost Implications of Participant Product Selection in USDA’s Special Supplemental Nutrition Program for Women, Infants, and Children (WIC)," Economic Research Report 327184, United States Department of Agriculture, Economic Research Service.

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