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Heterogeneous impacts from a retail grocery acquisition: Do national and store brand prices respond differently?
Author(s) -
Çakır Metin,
Secor William G.
Publication year - 2018
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/agr.21545
Subject(s) - econlit , store brand , business , marketing , product (mathematics) , product differentiation , product category , focus (optics) , advertising , industrial organization , economics , microeconomics , physics , geometry , mathematics , medline , optics , cournot competition , political science , law
We investigate the extent to which a grocery retailer merger has different effects on the prices of national and store brands. Using retail scanner data, we retrospectively analyze a food retail acquisition in a large U.S. city. We focus on fluid milk and ready‐to‐eat (RTE) cereal categories, which represent a relatively homogenous and a relatively differentiated product category, respectively. We use a difference‐in‐difference estimation framework to obtain the causal effect of the acquisition on prices for the acquiring retailer. The primary finding is that the acquisition has heterogeneous price effects in the relatively differentiated RTE cereal category. The implications of results for consumers, food retailing, and merger analysis are discussed [EconLit citations: L11, L13, L22, L81].