Price and promotion effects of supermarket mergers
I use a unique data set of retail food prices to analyze mergers between supermarket chains. The data allow for an examination of the effects of mergers on prices, the frequency of promotions, and the depth of promotions. I find that increases in a chain’s share of the total US food sales are associated with price decreases, suggesting that supermarkets enjoy economies of scale and/or benefit from an improved bargaining position relative to their suppliers after a merger. I also find that mergers are associated with decreases in the frequency and depth of price-promotions.
|Date of creation:||Sep 2009|
|Date of revision:||Jun 2010|
|Publication status:||Published in Journal of Food and Agricultural Industrial Organization, Vol. 8 (2010) Prices, Promotions, and Supermarket Mergers|
|Contact details of provider:|| Postal: Box 504, Scobey Hall, Brookings, SD 57007-0895|
Web page: http://www.sdstate.edu/econ/
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