An Empirical Analysis of Assortment Similarities Across U.S. Supermarkets

Marketing Science (2010), Vol. 29, No. 5, pp 858-879

43 Pages Posted: 23 Sep 2008 Last revised: 13 Nov 2012

See all articles by Minha Hwang

Minha Hwang

McGill University - Faculty of Management

Bart J. Bronnenberg

Tilburg University, CentER

Raphael Thomadsen

Olin School - Washington University in St. Louis

Date Written: January 8, 2010

Abstract

This paper examines pairwise assortment similarities at U.S. supermarkets to understand how assortment composition and size are related to underlying factors that describe local store clientele, local competitive structure, and the retail outlets’ characteristics. The top-selling items, which cumulatively make up 50% of sales, are sold at nearly every store, but other items are viewed as optional. We find that, within states, supermarkets owned by the same chain carry similar assortments and that the composition of their clientele and the presence of competing stores have effects on assortment similarity that are an order of magnitude smaller than ownership structure. In contrast, we find that, across states, supermarkets owned by the same chain do version their assortment. We explain this difference using extant work on the minimal efficient scale of supermarkets and on local demand effects. Furthermore, we investigate the distribution and role of regional brands. We find that regional brands are primarily distributed by small regional chains or independent stores. “Value” regional brands are primarily distributed by supermarket firms without store brands, whereas the distribution of “premium” regional brands is unrelated to the presence of store brands. We discuss our findings in the context of modeling assortment decisions and manufacturers designing distribution policies.

Keywords: Retailing, assortment, supermarket, dyadic data

Suggested Citation

Hwang, Minha and Bronnenberg, Bart J. and Thomadsen, Raphael, An Empirical Analysis of Assortment Similarities Across U.S. Supermarkets (January 8, 2010). Marketing Science (2010), Vol. 29, No. 5, pp 858-879. Available at SSRN: https://ssrn.com/abstract=1271936 or http://dx.doi.org/10.2139/ssrn.1271936

Minha Hwang (Contact Author)

McGill University - Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada
514-398-4057 (Phone)

HOME PAGE: http://bigdataco.blogspot.ca

Bart J. Bronnenberg

Tilburg University, CentER ( email )

Warandelaan 2
Tilburg, 5037 AB
Netherlands
+31 13 466 8939 (Phone)
+31 13 466 8354 (Fax)

Raphael Thomadsen

Olin School - Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

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