Abstract

http://ssrn.com/abstract=1772822
 
 

References (30)



 
 

Citations (3)



 


 



Competing with Costco and Sam's Club: Warehouse Club Entry and Grocery Prices


Charles Courtemanche


University of North Carolina (UNC) at Greensboro - Department of Economics

Art Carden


Brock School of Business, Samford University

February 28, 2011


Abstract:     
Research shows that grocery stores reduce prices to compete with Walmart Supercenters. This study finds evidence that the competitive effects of two other big box retailers – Costco and Walmart-owned Sam's Club – are quite different. Using city-level panel grocery price data matched with a unique data set on Walmart and warehouse club locations, we find that Costco entry is associated with higher grocery prices at incumbent retailers, and that the effect is strongest in cities with small populations and high grocery store densities. This is consistent with incumbents competing with Costco along non-price dimensions such as product quality or quality of the shopping experience. We find no evidence that Sam’s Club entry affects grocery stores’ prices, consistent with Sam’s Club’s focus on small businesses instead of consumers.

Number of Pages in PDF File: 46

Keywords: Wal-Mart, Walmart, Costco, Sam’s Club, Warehouse Clubs, Grocery Prices, Competition, Retail

JEL Classification: L11, L13, L81, R10

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Date posted: March 1, 2011  

Suggested Citation

Courtemanche, Charles and Carden, Art, Competing with Costco and Sam's Club: Warehouse Club Entry and Grocery Prices (February 28, 2011). Available at SSRN: http://ssrn.com/abstract=1772822 or http://dx.doi.org/10.2139/ssrn.1772822

Contact Information

Charles Courtemanche (Contact Author)
University of North Carolina (UNC) at Greensboro - Department of Economics ( email )
Greensboro, NC 27402-6165
United States
Art Carden
Brock School of Business, Samford University ( email )
800 Lakeshore Drive
Birmingham, AL 35229
United States
HOME PAGE: http://www.artcarden.com
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