Retail Mergers and Food Prices: Evidence from France

Allain, Marie-Laure; Chambolle, Claire; Turolla, Stéphane; Villas-Boas, Sofia Berto

doi:10.1111/joie.12153

Cited by 57 publications

(42 citation statements)

References 40 publications

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“…In a closely related study, Allain et al. () measure price changes after a nationwide merger between two French food retailers using a difference‐in‐difference (DID) method with household purchase data. They find that the merger is positively correlated with the merging firms’ prices, and has significantly increased competitors’ prices.…”

Section: Related Literaturementioning

confidence: 99%

“…There are a number of studies investigating the overall impact of mergers and acquisitions on prices (e.g., Allain, Chambolle, Turolla, & Villas‐boas, ; Ashenfelter, ; Hosken, Olson, & Smith, ), however the heterogeneous effects of the mergers on product types has not been studied. In this article, we fill this void by asking the following question: how do SB prices change in a product category relative to those of NBs after a merger or acquisition?…”

Section: Introductionmentioning

confidence: 99%

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Heterogeneous impacts from a retail grocery acquisition: Do national and store brand prices respond differently?

Cakir

Secor²

2018

Agribusiness

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We investigate the extent to which a grocery retailer merger has different effects on the prices of national and store brands. Using retail scanner data, we retrospectively analyze a food retail acquisition in a large U.S. city. We focus on fluid milk and ready-to-eat (RTE) cereal categories, which represent a relatively homogenous and a relatively differentiated product category, respectively. We use a differencein-difference estimation framework to obtain the causal effect of the acquisition on prices for the acquiring retailer. The primary finding is that the acquisition has heterogeneous price effects in the relatively differentiated RTE cereal category. The implications of results for consumers, food retailing, and merger analysis are discussed [Econ-Lit citations: L11, L13, L22, L81].(i) retailers can contract with large national brand manufacturers who have excess capacity to produce store brands, (ii) retailers can contract with small manufacturers to produce only store brands, (iii) retailers can own manufacturing facilities and produce store brands for themselves. 524

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Section: Related Literaturementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Heterogeneous impacts from a retail grocery acquisition: Do national and store brand prices respond differently?

Cakir

Secor²

2018

Agribusiness

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“…On the other hand, mergers resulting in estimated price decreases of more than 2% occurred mainly in markets with low levels of concentration. Similarly, Allain et al [2017] study the impact of a merger in the French supermarket industry on food prices, by comparing post merger changes in prices at stores located in local markets impacted by the merger with prices at stores located in comparison markets. Results report a significant price increase of about 4%5% for merging parties' stores, re gardless of their locations (i.e., impacted or not impacted by the merger), and a significant price increase of about 2% in competing brand stores that were locally impacted by higher market concentration.…”

Section: Ii(i) Ex Post Merger Evaluationmentioning

confidence: 99%

Effectiveness of Merger Remedies: Evidence from the Retail Gasoline Industry

Lagos

2018

The J Industrial Economics

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This article assesses the effectiveness of outlet divestitures as remedies in a merger between two large gasoline retailers. Results show that divestitures are effective in disciplining the increase in margins generated by the merger, but only for competing gas stations located within a one kilometer radius and only in municipalities with a low density of stations impacted by the merger. Interestingly, this density indicator is a good predictor of both the anticompetitive effect of the merger and the effectiveness of divestitures. Finally, prices of one merging party decreased in locations unaffected by higher concen tration, evidencing the presence of efficiency gains.

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“…Allain et al. () use this propensity score estimator in estimating the effect of a major merger of French food retailers on consumer prices.…”

mentioning

confidence: 99%

Do retail mergers affect competition? Evidence from grocery retailing

Hosken

Olson

Smith

2017

Economics Manag Strategy

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This study estimates the price effects of horizontal mergers in the U.S. grocery retailing industry. We examine fourteen regions affected by mergers, including mergers in highly concentrated and relatively unconcentrated markets. We identify price effects by comparing markets affected by mergers to unaffected markets using differencein-difference estimation with three different comparison groups, propensity score weights, and by using the synthetic control method. Our results are robust to the choice of control group and estimation technique. We find that mergers in highly concentrated markets are most frequently associated with price increases, and mergers in less concentrated markets are most often associated with price decreases.

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Retail Mergers and Food Prices: Evidence from France

Cited by 57 publications

References 40 publications

Heterogeneous impacts from a retail grocery acquisition: Do national and store brand prices respond differently?

Heterogeneous impacts from a retail grocery acquisition: Do national and store brand prices respond differently?

Effectiveness of Merger Remedies: Evidence from the Retail Gasoline Industry

Do retail mergers affect competition? Evidence from grocery retailing

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