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Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart

2006; Linguagem: Inglês

10.1920/wp.cem.2006.0606

1753-9196

Jerry A. Hausman, Ephraim S. Leibtag,

Consumer Retail Behavior Studies

Consumers often benefit from increased competition in differentiated product settings.In previous research Hausman (1997a, 1997b, 1999, 2002) has estimated the increased consumer welfare from the introduction of new brand, e.g.Apple Cinnamon Cheerios, and new products, e.g.mobile telephones.In this paper we consider consumer benefits from increased competition in a differentiated product setting: the spread of nontraditional retail outlets.Non-traditional outlets, including supercenters, warehouse club stores, and mass merchandisers have grown in popularity and nearly doubled their share of consumer food-at-home expenditures from 1998 to 2003 3 .Within this non-traditional retail group, supercenters have experienced the largest increase over this time period, but warehouse club stores and dollar stores have also experienced significant increases in their share of the consumer food dollar as U.S. consumers attempt to find the best combination of prices and services at their retailer of choice.Supercenters are extremely large stores that sell a wide variety of products.They are differentiated from more traditional shopping outlets that often specialize in a specific category: supermarkets specialize in selling food, although they carry other products, while a supercenter will sell food, clothing, prescription drugs, clothing, home office supplies, and electronic equipment.These supercenters are new outlets within a given geographic market defined by household shopping patterns.They originally began in the southern and southwestern areas of the US. 4 Over the past few years they have spread to the central U.S. and they