Promotional Competition Between Supermarket Chains

Promotional Competition Between Supermarket Chains This article measures promotional competition between two major supermarket chains in the United States. The approach does not rely upon quantity sales data and can be applied to any industry that features advertised sales. The results indicate that retailers do compete using promotions. A supermarket promotion in one week significantly increases the probability of a promotion for the same product at rival stores in the following week. Additionally, competitors seek to match or exceed the price cuts of their rivals when responding to promotions. Oligopolistic competition plays a significant role in determining the timing of sales and retail price variation. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Promotional Competition Between Supermarket Chains

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Publisher
Springer Journals
Copyright
Copyright © 2012 by Springer Science+Business Media, LLC (outside the USA)
Subject
Economics / Management Science; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-012-9352-x
Publisher site
See Article on Publisher Site

Abstract

This article measures promotional competition between two major supermarket chains in the United States. The approach does not rely upon quantity sales data and can be applied to any industry that features advertised sales. The results indicate that retailers do compete using promotions. A supermarket promotion in one week significantly increases the probability of a promotion for the same product at rival stores in the following week. Additionally, competitors seek to match or exceed the price cuts of their rivals when responding to promotions. Oligopolistic competition plays a significant role in determining the timing of sales and retail price variation.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Apr 15, 2012

References

  • Private labels and manufacturer counterstrategies
    Mills, D.
  • Supermarket choice and supermarket competition in market equilibrium
    Smith, H.
  • The price-concentration relationship in retailing: Retesting Newmark
    Yu, C.; Connor, J.

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