TY - JOUR
T1 - Competition effects of supermarket services
AU - Bonanno, Alessandro
AU - Lopez, Rigoberto A.
N1 - Funding Information:
The authors wish to thank the editor, Wally Thurman, two anonymous reviewers, Ronald Cotterill, Xenia Matschke, and participants of the 2006 NAREA and the 2007 AAEA annual meetings for their helpful comments that improved the manuscript. The content of the article, however, is the sole responsibility of the authors. Funding from CSREES Special Grant 2006-34178-17109 via the Food Marketing Policy Center at the University of Connecticut is gratefully acknowledged.
PY - 2009
Y1 - 2009
N2 - This article investigates the competition effects of supermarket services using fluid milk as a case study. A simultaneous equation model for services and price competition is estimated with scanner data from fifteen supermarket chains using two alternative measures of services, namely store size and principal components of in-store services. Empirical results show that increasing services results in economies of scope, greater supermarket chain-level demand, lower price elasticity of demand, and enhanced market power, leading to higher milk prices and quantity sold. We conclude that, as result of service competition, supermarkets differentiate themselves from competitors and successfully attract less price-sensitive consumers.
AB - This article investigates the competition effects of supermarket services using fluid milk as a case study. A simultaneous equation model for services and price competition is estimated with scanner data from fifteen supermarket chains using two alternative measures of services, namely store size and principal components of in-store services. Empirical results show that increasing services results in economies of scope, greater supermarket chain-level demand, lower price elasticity of demand, and enhanced market power, leading to higher milk prices and quantity sold. We conclude that, as result of service competition, supermarkets differentiate themselves from competitors and successfully attract less price-sensitive consumers.
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U2 - 10.1111/j.1467-8276.2009.01255.x
DO - 10.1111/j.1467-8276.2009.01255.x
M3 - Article
AN - SCOPUS:67049165136
SN - 0002-9092
VL - 91
SP - 555
EP - 568
JO - American Journal of Agricultural Economics
JF - American Journal of Agricultural Economics
IS - 3
ER -