Food‐Retail Development and the Myth of Everyday Low Prices: The Case of Brazil

18 Pages Posted: 7 Dec 2011

See all articles by Guilherme Fowler Monteiro

Guilherme Fowler Monteiro

Insper Institute of Education and Research; Center for Organization Studies

Elizabeth Maria Merc Querido Farina

University of São Paulo (USP) - Department of Economics

Rubens Nunes

University of Sao Paulo (USP) - Department of Biosystems Engineering

Date Written: January 2012

Abstract

This article analyses the changes in Brazilian food retailing by investigating the co‐existence of, and the pricing variation across, large supermarket chains and small independent supermarkets. It uses cointegration tests to show that, despite the widespread belief that small supermarkets are inefficient and charge higher prices, they in fact charge lower prices. Accordingly, in contrast to the prevailing literature on food‐retail development, competition in food retail is complex and cannot be described as a simple Darwinian process of market concentration. The article explores the survival of small retail and its consequences for the current discussion on modern food retail in developing countries.

Keywords: Food‐retail development, supermarkets, competition, price strategies

Suggested Citation

Monteiro, Guilherme Fowler and Merc Querido Farina, Elizabeth Maria and Nunes, Rubens, Food‐Retail Development and the Myth of Everyday Low Prices: The Case of Brazil (January 2012). Development Policy Review, Vol. 30, Issue 1, pp. 49-66, 2012. Available at SSRN: https://ssrn.com/abstract=1969232 or http://dx.doi.org/10.1111/j.1467-7679.2012.00559.x

Guilherme Fowler Monteiro (Contact Author)

Insper Institute of Education and Research ( email )

R Quata 300
Sao Paulo, 04542-030
Brazil

Center for Organization Studies

Av. Luciano Gualberto, 908
Sao Paulo, Sao Paulo 05508-900
Brazil

Elizabeth Maria Merc Querido Farina

University of São Paulo (USP) - Department of Economics ( email )

Av. Pádua Dias, 11 - C.P. 9
Sao Paulo SP, 05508-900
Brazil

Rubens Nunes

University of Sao Paulo (USP) - Department of Biosystems Engineering ( email )

Rua Luciano Gualberto, 315
São Paulo, São Paulo 14800-901
Brazil

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