Abstract

http://ssrn.com/abstract=994460
 
 

References (33)



 
 

Citations (20)



 


 



The Evolving Food Chain: Competitive Effects of Wal-Mart's Entry into the Supermarket Industry


Emek Basker


University of Missouri - Department of Economics; U.S. Census Bureau - Center for Economic Studies

Michael D. Noel


University of California, San Diego

July 2007


Abstract:     
We analyze the effect of Wal-Mart's entry into the grocery market using a unique store-level price panel data set. We use OLS and two IV specifications to estimate the effect of Wal-Mart's entry on competitors' prices of 24 grocery items across several categories. Wal-Mart's price advantage over competitors for these products averages approximately 10%. On average, competitors' response to Wal-Mart's entry is a price reduction of 1-1.2%, mostly due to smaller-scale competitors: the response of the big three supermarket chains (Albertson's, Safeway, and Kroger) is less than half that size. We confirm our results using a falsification exercises, in which we test for Wal-Mart's effect on prices of services that it does not provide, such as movie tickets and dry cleaning services.

Number of Pages in PDF File: 37

Keywords: Wal-Mart, Retail Prices, Supermarkets, Price Competition

JEL Classification: L11, L13, L81

working papers series





Download This Paper

Date posted: June 18, 2007  

Suggested Citation

Basker, Emek and Noel, Michael D., The Evolving Food Chain: Competitive Effects of Wal-Mart's Entry into the Supermarket Industry (July 2007). Available at SSRN: http://ssrn.com/abstract=994460 or http://dx.doi.org/10.2139/ssrn.994460

Contact Information

Emek Basker (Contact Author)
University of Missouri - Department of Economics ( email )
118 Professional Building
Columbia, MO 65211
United States
573-882-6023 (Phone)
573-882-2697 (Fax)
HOME PAGE: http://web.missouri.edu/~baskere/
U.S. Census Bureau - Center for Economic Studies ( email )
4600 Silver Hill Road
Washington, DC 20233-9100
United States
Michael D. Noel
University of California, San Diego ( email )
9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0502
United States
Feedback to SSRN


Paper statistics
Abstract Views: 2,331
Downloads: 514
Download Rank: 30,468
References:  33
Citations:  20

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo3 in 0.407 seconds