Dynamics in a Mature Industry: Entry, Exit, and Growth of Big‐Box Grocery Retailers

25 Pages Posted: 13 Feb 2015

See all articles by Dan Hanner

Dan Hanner

Government of the United States of America - Federal Trade Commission

Daniel S. Hosken

Government of the United States of America - Federal Trade Commission

Luke Olson

Federal Trade Commission

Loren Smith

Compass Lexecon

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Date Written: Spring 2015

Abstract

This paper measures market dynamics within the U.S. grocery industry (defined as supermarket, supercenter, and club retailers). We find that despite being a mature industry, the grocery industry is remarkably dynamic. Each year retailers open or close roughly 7% of U.S. stores. We also find significant changes in the size of firms’ operations within markets over time. These changes in relative size are largely the result of expansion or contraction by incumbents rather than the result of firm entry or exit. In fact, entry and exit are quite rare, except by small firms. Moreover, only in small markets do new entrants gain substantial market share.

Suggested Citation

Hanner, Dan and Hosken, Daniel S. and Olson, Luke and Smith, Loren, Dynamics in a Mature Industry: Entry, Exit, and Growth of Big‐Box Grocery Retailers (Spring 2015). Journal of Economics & Management Strategy, Vol. 24, Issue 1, pp. 22-46, 2015, Available at SSRN: https://ssrn.com/abstract=2564808 or http://dx.doi.org/10.1111/jems.12087

Dan Hanner (Contact Author)

Government of the United States of America - Federal Trade Commission ( email )

600 Pennsylvania Ave., NW
Washington, DC 20580
United States

Daniel S. Hosken

Government of the United States of America - Federal Trade Commission ( email )

600 Pennsylvania Ave., NW
Washington, DC 20580
United States

Luke Olson

Federal Trade Commission ( email )

600 Pennsylvania Avenue NW
Washington, DC 20580
United States

Loren Smith

Compass Lexecon ( email )

United States

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