Retail Sector Concentration and Price Dynamics in the Euro Area: A Regional Analysis

29 Pages Posted: 16 Mar 2012

Date Written: October 12, 2011


We conduct a regional analysis of the relationship between market concentration and price dynamics in the grocery retail sector, focusing on a sample of five categories of goods belonging to the 12 COICOP aggregation and on a panel of countries that includes Germany, Spain, Finland, Italy, Austria and Portugal. Using a unique census-type dataset on retailers, we construct Herfindahl-Hirschman indices of concentration at the buying group, parent company and individual shop level for a sample of 118,540 large grocery stores and we study the association between these measures and regional price changes. Our results point to a positive association between retail market concentration and price growth in food and beverages, alcohol and tobacco and miscellaneous goods in the time span 2003-2010 at the buying, parental group and store level for the pooled sample of countries. The relation reverses sign for clothing and footwear and household equipment. This evidence is robust to different specifications of concentration indices.

Keywords: market concentration, price dynamics, buying group, parent company, regional Herfindahl-Hirschman indices

JEL Classification: L1, L4, L8, E31

Suggested Citation

Ciapanna, Emanuela and Rondinelli, Concetta, Retail Sector Concentration and Price Dynamics in the Euro Area: A Regional Analysis (October 12, 2011). Bank of Italy Occasional Paper No. 107, Available at SSRN: or

Emanuela Ciapanna

Bank of Italy ( email )

Research Department
Via Nazionale 91
Roma, 00184
00390647922188 (Phone)

Concetta Rondinelli (Contact Author)

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184

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