The Evolving Food Chain : Competitive Effects of Wal-Mart ’ s Entry into the Supermarket Industry ∗

  title={The Evolving Food Chain : Competitive Effects of Wal-Mart ’ s Entry into the Supermarket Industry ∗},
  author={Emek Basker},
  • Emek Basker
  • Published 2007
We analyze the effect of Wal-Mart’s entry into the grocery market using a unique store-level price panel data set. We use OLS and two IV specifications to estimate the effect of Wal-Mart’s entry on competitors’ prices of 24 grocery items across several categories. Wal-Mart’s price advantage over competitors for these products averages approximately 10%. On average, competitors’ response to WalMart’s entry is a price reduction of 1–1.2%, mostly due to smaller-scale competitors: the response of… CONTINUE READING
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