Projects Funded for Robert Innes

2010-2011

The Impact of Supercenters on Grocery Retailing

Abstract

<p>The broad objective of this project was to study the impact of supercenter competition (with supermarkets) on the structure and conduct of grocery retailing, building and evaluating appropriate industrial organization models of this competition. The project began with modeling of symmetric multiproduct retail markets that encompass supermarket choices of store penetration, in-store product variety, and product pricing. Impacts of vertical contracts (including "slotting fees") were studied, and salutary impacts of these contracts on product variety decisions were identified. Preliminary research was conducted on the impacts of alternate ownership structures for outcomes from multi-category (supercenter and mall) competition, identifying strategic reasons for the empirical observation of lower prices and lower product variety with supercenter (vs. supermarket) structures.</p>