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Competition Effects of Supermarket Services

Author

Listed:
  • Bonanno, Alessandro
  • Lopez, Rigoberto A.

Abstract

This paper investigates the effect of in-store services on retail food prices, supermarket competition, and demand using fluid milk as a case study. It is shown that higher-service supermarkets charge higher milk prices essentially because of an increase in market power due to differentiation of service offering. Results show that different types of services impact milk prices differently, that upscale food-retailers face stronger competition in newer services, and that service competition results in a trade-off for the consumer between the attractiveness of the enhanced retail configuration and the increase in prices.

Suggested Citation

  • Bonanno, Alessandro & Lopez, Rigoberto A., 2007. "Competition Effects of Supermarket Services," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9833, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea07:9833
    DOI: 10.22004/ag.econ.9833
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    Cited by:

    1. Bonanno, Alessandro & Chenarides, Lauren & Goetz, Stephan J., 2012. "Limited Food Access as an Equilibrium Outcome: An Empirical Analysis," 2012 AAEA/EAAE Food Environment Symposium 123196, Agricultural and Applied Economics Association.
    2. Stephen Martin, 2012. "Market Structure and Market Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(2), pages 87-108, March.
    3. Andreas Widenhorn & Klaus Salhofer, 2014. "Price Sensitivity Within and Across Retail Formats," Agribusiness, John Wiley & Sons, Ltd., vol. 30(2), pages 184-194, March.
    4. Davis, David E., 2009. "Price and promotion effects of supermarket mergers," SDSU Working Papers in Progress 12009, South Dakota State University, Department of Economics, revised Jun 2010.
    5. Bonanno, Alessandro & Ghosh, Gaurav S., 2010. "SNAP Efficacy and Food Access – A Nationwide Spatial Analysis," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116437, European Association of Agricultural Economists.

    More about this item

    Keywords

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    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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