The relationship between price and retail concentration: evidence from the US food industry

Hovhannisyan, Vardges; Cho, Clare; Bozic, Marin

doi:10.1093/erae/jby026

Cited by 14 publications

(19 citation statements)

References 34 publications

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“…Other traditional retailers-such as traditional markets and neighborhood kiosks-may also be affected negatively by further supermarket expansion, but to a lesser extent than grocery stores. These types of competitive relationships between modern and traditional retailers are in line with earlier observations in Asia, Europe, and the USA [26,40,[42][43][44].…”

Section: Factors Influencing the Use Of Modern Retailerssupporting

confidence: 88%

Modernization of African Food Retailing and (Un)healthy Food Consumption

Khonje

Qaim

2019

Sustainability

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Food environments in Africa are changing rapidly, with modern retailers—such as supermarkets, hypermarkets, and fast-food restaurants—gaining in importance. Changing food environments can influence consumers’ food choices and dietary patterns. Recent research has suggested that the growth of supermarkets leads to more consumption of processed foods, less healthy diets, and rising obesity. However, relatively little is known about what type of consumers actually use modern supermarkets and to what extent. Moreover, focusing only on supermarkets may be misleading, as most consumers obtain their food from various modern and traditional retailers. We add to the literature by examining relationships between consumers’ socioeconomic status, use of different modern and traditional retailers, and dietary patterns. The analysis uses household survey data from urban Zambia. Results show that two-thirds of the households use modern and traditional retailers simultaneously, but that richer households are more likely than poorer ones to use supermarkets and hypermarkets. Use of modern retailers is positively associated with higher consumption of ultra-processed foods, after also controlling for income and other socioeconomic factors. However, the use of traditional stores and kiosks is also positively associated with the consumption of ultra-processed foods, suggesting that modern retailers are not the only drivers of dietary transitions.

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Section: Factors Influencing the Use Of Modern Retailerssupporting

confidence: 88%

Modernization of African Food Retailing and (Un)healthy Food Consumption

Khonje

Qaim

2019

Sustainability

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“…Note that while endogeneity of most firm‐specific variables is intuitive, classical industrial organization literature has, in particular, pointed towards potential endogeneity of industry concentration due to reverse causality between firm performance and industry structure as well as omitted variables (e.g., Evans et al, 1993; Froeb & Werden, 1991). Our IV strategy is therefore in line with recent literature in which estimation biases are mitigated by either constructing instruments or employing lagged values of concentration as instrumental variable (Hovhannisyan, Cho, & Bozic, 2019).…”

Section: Datasupporting

confidence: 57%

“…Along these lines, Hovhannisyan and Bozic (2016) argue that retailer bargaining power can have implications, not only for horizontal competition but also for vertical relationships along the supply chain. These include adverse effects for small food processors and farmers, decreased consumer welfare and higher prices as well as lower productivity growth (Griffith & Harmgart, 2012; Hovhannisyan et al, 2019; Sexton & Xia, 2018). For example, Carstensen (2000) shows that strategic behavior by dominant retailers can reduce the ability of agricultural producers to act as independent entrepreneurs.…”

Section: Implications and Conclusionmentioning

confidence: 99%

Profitability and profit persistence in EU food retailing: Differences between top competitors and fringe firms

2020

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We investigate the drivers and persistence of profits in EU food retailing by focusing on differences between “top competitors” and fringe food retailers using a sample of 12,786 firms from France, Spain, and Sweden between 2006 and 2014. We detect a high degree of profit persistence in food retailing, presumably caused by strong bargaining power towards processors. Moreover, we find that profit persistence is higher for “top competitors” such as members of Top‐5 chains regarding sales and that independent/specialized supermarkets generate lower profitability. The results provide insights regarding power imbalances in food retailing and thus support the development of managerial strategies as well as measures to enhance market efficiency.

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“…Russo and Goodhue, 2018;Li et al, 2006), we find empirical inconsistencies in food prices which deviate from the expectations derived from perfect competition models. Recent developments, such as the increased power concentration of retailers (Hovhannisyan et al, 2018), led to an increased attention towards farmer-retail relations in agricultural supply chains (Sexton, 2013).…”

Section: Conclusion and Discussionmentioning

confidence: 99%

“…This especially holds in modern agricultural markets, with abundance of food for most consumers in developed countries (e.g. Koning et al, 2008;Sexton, 2013), as well as increased concentration of the largest global retail companies (Hovhannisyan et al, 2018).…”

Section: Introductionmentioning

confidence: 99%

Econometric modelling of heterogeneity and structural changes in Dutch horticulture

Los

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The relationship between price and retail concentration: evidence from the US food industry

Cited by 14 publications

References 34 publications

Modernization of African Food Retailing and (Un)healthy Food Consumption

Modernization of African Food Retailing and (Un)healthy Food Consumption

Profitability and profit persistence in EU food retailing: Differences between top competitors and fringe firms

Econometric modelling of heterogeneity and structural changes in Dutch horticulture

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