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Market Definition and Market Power in the British Supermarket Industry


  • Ronald W. Cotterill

    () (University of Connecticut)


In this report I will explain how to measure relevant antitrust markets for the analysis of the market power of the leading supermarket chains in Great Britain. Given the recent enforcement practices of the Competition Commission and the analyses submitted by, or on behalf of, Tesco, Sainsbury, and other retailers, my explanation necessarily must also continue to the measurement of market power. Non-coordinated competitive effects are also called unilateral effects and I will use that term henceforth in this report. These strategic moves do not require the cooperation of other firms. Coordinated effects (tacit collusion) do depend upon the cooperation of other firms. The exercise of these types of market power is not mutually exclusive (Levy and Reitzes 1993). Both types can elevate prices or otherwise distort the price, quality, reach and service marketing mix in a market.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Ronald W. Cotterill, 2007. "Market Definition and Market Power in the British Supermarket Industry," Food Marketing Policy Center Research Reports 098, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  • Handle: RePEc:zwi:fpcrep:098

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    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. Clarke, Roger & Davies, Stephen & Waterson, Michael, 1984. "The Profitability-Concentration Relation: Market Power or Efficiency?," Journal of Industrial Economics, Wiley Blackwell, vol. 32(4), pages 435-450, June.
    3. Stephen Martin, 1979. "Advertising, Concentration, and Profitability: The Simultaneity Problem," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 639-647, Autumn.
    4. Jerry Hausman & Gregory Leonard & J. Douglas Zona, 1994. "Competitive Analysis with Differentiated Products," Annals of Economics and Statistics, GENES, issue 34, pages 143-157.
    5. repec:adr:anecst:y:1994:i:34:p:06 is not listed on IDEAS
    6. Ronald W. Cotterill & Andrew W. Franklin, 1999. "An estimation of consumer benefits from the public campaign to lower cereal prices," Agribusiness, John Wiley & Sons, Ltd., vol. 15(2), pages 273-287.
    7. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
    8. Timothy F. Bresnahan & Peter C. Reiss, 1990. "Entry in Monopoly Market," Review of Economic Studies, Oxford University Press, vol. 57(4), pages 531-553.
    9. 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.
    10. Masson, Robert T & Shaanan, Joseph, 1982. "Stochastic-Dynamic Limiting Pricing: An Empirical Test," The Review of Economics and Statistics, MIT Press, vol. 64(3), pages 413-422, August.
    11. Grant Devine & Bruce Marion, 1979. "The influence of consumer price information on retail pricing and consumer behavior," Framed Field Experiments 00138, The Field Experiments Website.
    12. Levy, David T & Reitzes, James D, 1992. "Anticompetitive Effects of Mergers in Markets with Localized Competition," Journal of Law, Economics, and Organization, Oxford University Press, vol. 8(2), pages 427-440, April.
    13. Benaissa Chidmi & Rigoberto A. Lopez, 2007. "Brand-Supermarket Demand for Breakfast Cereals and Retail Competition," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 324-337.
    14. repec:adr:anecst:y:1994:i:34 is not listed on IDEAS
    15. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73, pages 110-110.
    16. Cotterill, Ronald W, 1986. "Market Power in the Retail Food Industry: Evidence from Vermont," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 379-386, August.
    17. D. Grant Devine & Bruce W. Marion, 1979. "The Influence of Consumer Price Information on Retail Pricing and Consumer Behavior," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 228-237.
    18. Henry G. Manne, 1965. "Mergers and the Market for Corporate Control," Journal of Political Economy, University of Chicago Press, vol. 73, pages 351-351.
    19. Bresnahan, Timothy F & Reiss, Peter C, 1991. "Entry and Competition in Concentrated Markets," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 977-1009, October.
    20. Baker, Jonathan B & Baresnahan, Timothy F, 1985. "The Gains from Merger or Collusion in Product-differentiated Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 33(4), pages 427-444, June.
    21. Orley Ashenfelter & David Ashmore & Jonathan Baker & Suzanne Gleason & Daniel Hosken, 2006. "Empirical Methods in Merger Analysis: Econometric Analysis of Pricing in FTC v. Staples," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 13(2), pages 265-279.
    22. 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.
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    Cited by:

    1. Emanuela Ciapanna & Concetta Rondinelli, 2011. "Retail sector concentration and price dynamics in the euro area: a regional analysis," Questioni di Economia e Finanza (Occasional Papers) 107, Bank of Italy, Economic Research and International Relations Area.

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