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Buyer and Seller Power in Grocery Retailing: Evidence from Italy

Revista de Economía del Rosario, Vol. 10, No. 2, December 2007

18 Pages Posted: 6 Feb 2008  

Monica Giulietti

Aston University - Economics and Strategy Group

Abstract

This work investigates the effect of upstream and downstream market concentration on retailers' price-cost margins using bimonthly data over the period 1989-1992 disaggregated by retailer type and product. In addition to horizontal concentration, differentiation, and cost factors, the analysis includes buyer power amongst the determinants of retailers' profitability, as a result of vertical bargaining. Using a fixed effects model in first differences we find evidence of bargaining activity between large chains and food manufacturers.

Our analysis of price competition at the retail level also reveals some interdependence in the pricing decisions of the largest retail organisations and price leadership by large independent shops.

Keywords: price-cost margins, vertical bargaining, price competition, Italian grocery trade, panel data

JEL Classification: L13, L81, L42, C78, C23

Suggested Citation

Giulietti, Monica, Buyer and Seller Power in Grocery Retailing: Evidence from Italy. Revista de Economía del Rosario, Vol. 10, No. 2, December 2007. Available at SSRN: https://ssrn.com/abstract=1090025

Monica Giulietti (Contact Author)

Aston University - Economics and Strategy Group ( email )

Birmingham B4 7ET
United Kingdom
+44 0 121 204 3107 (Phone)

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