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Please use this identifier to cite or link to this item: http://purl.umn.edu/49582

Title: Supermarket Competition through Price Promotions: A Cross Category Analysis
Authors: Volpe, Richard J., III
Authors (Email): Volpe, Richard James III (ricky.volpe@gmail.com)
Issue Date: 2009
Series/Report no.: Selected Paper
610193
Abstract: This study takes an important first step at quantifying the nature of competition between major supermarket chains through price promotions. Using data that covers virtually the entire product menus of supermarkets representing two major chains in 18 cities, I examine both the effect of direct competition on promotional intensity and the nature of promotional competition itself. In a counterintuitive finding, there appears to slightly less promotional activity in cities in which both chains compete directly, as compared to cities in which only one chain operates. Moreover, most promotional activity tends to be retaliatory, rather than accommodating, in nature. This study takes an important first step at quantifying the nature of competition between major supermarket chains through price promotions. Using data that covers virtually the entire product menus of supermarkets representing two major chains in 18 cities, I examine both the effect of direct competition on promotional intensity and the nature of promotional competition itself. In a counterintuitive finding, there appears to slightly less promotional activity in cities in which both chains compete directly, as compared to cities in which only one chain operates. Moreover, most promotional activity tends to be retaliatory, rather than accommodating, in nature.
URI: http://purl.umn.edu/49582
Institution/Association: Agricultural and Applied Economics Association>2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin
Total Pages: 21
Collections:2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin

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