IDEAS home Printed from
   My bibliography  Save this paper

The Predatory Impacts of the Ahold/Pathmark Offer to Buy the Big V ShopRite Supermarket Chain


  • Ronald W. Cotterill


This paper presents a unique empirical analysis of Salop and Scheffman?s raising rival?s cost theory of predation. The cost efficiency of cooperative wholesaling organizations including the nations largest, Wakefern Food Corporation, are highly susceptible to throughput volume. The Royal Ahold/Pathmark offer to purchase Wakefern?s largest member via a bankruptcy proceeding that attempted to supercede its membership contract, if consummated, would have reduced Wakefern?s volume by 13 percent. It also would have triggered a domino effect of other member exits because it would have raised the costs of supplying remaining members. This report marshals the available empirical evidence to demonstrate that the predatory move by Royal Ahold and Pathmark would most likely be very profitable for them because it would have diminished competition in many markets where they compete with ShopRite supermarkets. Thus in this case, the move is credible.

Suggested Citation

  • Ronald W. Cotterill, 2002. "The Predatory Impacts of the Ahold/Pathmark Offer to Buy the Big V ShopRite Supermarket Chain," Food Marketing Policy Center Research Reports 064, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  • Handle: RePEc:zwi:fpcrep:064

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-137, January.
    2. Cotterill, Ronald W & Haller, Lawrence E, 1992. "Barrier and Queue Effects: A Study of Leading U.S. Supermarket Chain Entry Patterns," Journal of Industrial Economics, Wiley Blackwell, vol. 40(4), pages 427-440, December.
    3. Newmark, Craig M., 1990. "A new test of the price-concentration relationship in grocery retailing," Economics Letters, Elsevier, vol. 33(4), pages 369-373, August.
    4. Chih-ching Yu & John M. Connor, 2002. "The price-concentration relationship in grocery retailing: Retesting Newmark," Agribusiness, John Wiley & Sons, Ltd., vol. 18(4), pages 413-426.
    5. Cotterill, Ronald W. & Dhar, Tirtha Pratim & Franklin, Andrew W., 1999. "Post Merger Price Conduct: A Case Study of Pricing in Connecticut Markets After the 1996 Royal Ahold-Stop & Shop Merger," Research Reports 25198, University of Connecticut, Food Marketing Policy Center.
    6. Salop, Steven C & Scheffman, David T, 1983. "Raising Rivals' Costs," American Economic Review, American Economic Association, vol. 73(2), pages 267-271, May.
    7. Chevalier, Judith A, 1995. " Do LBO Supermarkets Charge More? An Empirical Analysis of the Effects of LBOs on Supermarket Pricing," Journal of Finance, American Finance Association, vol. 50(4), pages 1095-1112, September.
    Full references (including those not matched with items on IDEAS)


    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:zwi:fpcrep:064. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.