Product Market Competition and Human Resource Practices in the Retail Food Sector

Abstract

In the wake of Wal‐Mart and other mass merchandisers’ entry into food retailing, the nature of competition in the industry has changed radically. Using longitudinal data on workers and firms to construct measures of compensation and churning for traditional food retailers, this paper examines how these measures change in response to mass merchandiser entry. While there is considerable heterogeneity across retail food establishments, human resource practices are persistent even in the face of new external competition.

Supercenters, Unionized Labor, and Performance in Food Retail

“…The results, in conjunction with the work of Davis et al. (), suggest that the declining union coverage in food retailing is largely the result of unionized firms dropping out than firms dropping their union status.…”

“…Recall that Davis et al. () demonstrated that heterogeneous competition was more likely to induce exit from the market than store‐level reductions in human resource practices. Hence the coefficient on UnionSupershare and the marginal effect may be reflecting the superior performance of those stores that successfully compete with supercenters.…”

“…The only study of which I am aware that examines supercenters and unionism jointly is Davis et al. (), which focused on the human resource practices of retailers in conjunction with the changing food retail landscape. The authors showed that firms are slow to respond to heterogeneous competition, including that from supercenters and mass merchandisers, by adjusting their human resources practices.…”

“…Little attention, save for Davis et al. (), has been paid to unionization and food retail in the academic literature since the 1980s . One reason for this may the ongoing, long‐term decline in grocery unionization.…”

A Two-Level Purchase Problem for Food Retailing in Japan

“…Increased competition from alternative retail formats brings significant changes into the retail food industry. Motivated by recognizing the changes, Davis et al [26] examine the labor market adjustment of firms in response to competitive entry by using a large-scale longitudinal employer-employee matched data set. By applying the analytic hierarchy process (AHP), Erol et al [27] propose indicators for future evaluation of industrial sustainability performance for grocery retailing in terms of the social, environmental and economic sustainability aspects.…”