Heterogeneous impacts from a retail grocery acquisition: Do national and store brand prices respond differently?

Cakir, Metin; Secor, William

doi:10.1002/agr.21545

Cited by 4 publications

(3 citation statements)

References 20 publications

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“…We begin by documenting market concentration trends since 1990. Much has been written about the increase in market concentration in grocery retailing and its implications for competition in the last two decades (e.g., Richards and Pofahl 2010; Sexton 2013; Çakır and Secor 2018). A notable trend is that the industry saw an increasing number of mergers and acquisitions—primarily driven by the supermarkets' response to the expansion of general merchandise retailers into the food space (Ellickson 2007; Richards and Hamilton 2013)—resulting in higher concentration in the food industry.…”

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confidence: 99%

Rural Food Retailing and Independent Grocery Retailer Exits

Cakir¹,

Kong²,

Cho³

et al. 2020

American J Agri Economics

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We investigate the food retailing landscape and the exit of independent grocery stores in rural America using U.S. NETS data. Our paper makes several contributions that could potentially help the agenda for future research and public policy. We begin by documenting local concentration trends in food retailing and how they change across rural and urban markets from 1990 to 2015. Then, we conduct two event studies to examine how entry by a large chain is associated with the local market concentration and independent grocery retailer (IGR) exits. Last, we document the IGR exit rate in rural markets for a period of twenty‐five years and investigate its determinants in a regression framework. Our results show that market concentration in food retailing has increased since 1990, but the increasing trend after the Great Recession of 2008 is particularly noticeable. The local concentration differs substantially by the urban status of markets. Focusing on rural markets, we show that entry by a large food retailer is associated with higher market concentration and the decreasing number of IGRs. We also find that the annual average IGR exit rate is around 6.6% during the study period. The IGRs that are younger that operate in relatively more competitive markets, and that face entry by a large chain, are more likely to exit. Also, IGR rates are higher in markets with lower median income and higher poverty rates. We discuss how our results can potentially inform policies on sustainable rural development, food access, and food insecurity in rural communities.

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confidence: 99%

Rural Food Retailing and Independent Grocery Retailer Exits

Cakir¹,

Kong²,

Cho³

et al. 2020

American J Agri Economics

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“…To define the treatment and control groups we follow a strategy that is similar to those employed in studies of mergers in retail markets (Houde 2012;Allain et al 2017;Çakır and Secor 2018). In this literature, the treatment group is defined as the stores that are affected directly which are merging stores or indirectly which are close competitors, determined based on a predefined spatial proximity measure.…”

Section: Empirical Strategymentioning

confidence: 99%

Effects of Package Size on Household Food Purchases

Cakir¹,

Balagtas²,

Okrent³

et al. 2019

Applied Eco Perspectives Pol

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This article analyzes household food purchase behavior in response to changes in product package size. In particular, we exploit food manufacturer package downsizing strategy and design a difference-indifference analysis to track shifts in household purchase volume in affected and comparison product groups before and after package size changes. We use UPC-level purchase data from a panel of households over a seven-year period for analysis. Our empirical approach overcomes two important limitations of the extant literature: it (i) accounts for determinants of purchase behavior and (ii) produces results that elucidate the long-term effects of package size changes. The main finding is that, on average, smaller package size significantly reduces household purchase volume, which indicates a positive correlation between package size and food-at-home consumption. The results also show that downsizing does not have a significant effect on the purchase volume of nondownsized products and on the number of packages purchased. The implications of the results for policy and potential interventions are discussed.

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“…Results report a significant price increase of about 4%5% for merging parties' stores, re gardless of their locations (i.e., impacted or not impacted by the merger), and a significant price increase of about 2% in competing brand stores that were locally impacted by higher market concentration. Other recent papers that study the effects of mergers in the supermarket industry using similar techniques are Pires and Trindade [2017] and Çakır and Secor [2018]. Friberg and Romahn [2015] evaluate the impact of divestitures on prices following the CarlsbergPripps merger in the Swedish beer market.…”

Section: Ii(i) Ex Post Merger Evaluationmentioning

confidence: 99%

Effectiveness of Merger Remedies: Evidence from the Retail Gasoline Industry

Lagos

2018

The J Industrial Economics

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This article assesses the effectiveness of outlet divestitures as remedies in a merger between two large gasoline retailers. Results show that divestitures are effective in disciplining the increase in margins generated by the merger, but only for competing gas stations located within a one kilometer radius and only in municipalities with a low density of stations impacted by the merger. Interestingly, this density indicator is a good predictor of both the anticompetitive effect of the merger and the effectiveness of divestitures. Finally, prices of one merging party decreased in locations unaffected by higher concen tration, evidencing the presence of efficiency gains.

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Heterogeneous impacts from a retail grocery acquisition: Do national and store brand prices respond differently?

Cited by 4 publications

References 20 publications

Rural Food Retailing and Independent Grocery Retailer Exits

Rural Food Retailing and Independent Grocery Retailer Exits

Effects of Package Size on Household Food Purchases

Effectiveness of Merger Remedies: Evidence from the Retail Gasoline Industry

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