Market Consolidation and Pricing Developments in Grocery Retailing: A Case Study

Ratula Chakraborty, Paul Dobson, Jonathan Seaton, Michael Waterson

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Abstract

When large retailers merge, there is a concern that a sudden and marked increase in concentration will alter the intensity and nature of price competition to the detriment of consumers. This chapter considers just such a situation in regard to UK grocery retailing, which has witnessed steadily increasing concentration over recent years, advanced by a series of mergers. Specifically, we examine the nature of price competition amongst the major “one-stop-shop” retail chains before, during, and after the Safeway/Morrison merger in March 2004.We find the merger offered consumers an immediate windfall benefit — with average prices falling straight after the merger—and more intriguingly appears to have led to (or at least is associated with) a marked change in the character of price competition in the market.
Original languageEnglish
Title of host publicationThe Analysis of Competition Policy and Sectoral Regulation
EditorsMartin Peitz, Yossi Spiegel
PublisherWorld Scientific-Now Publishers Series in Business
Chapter1
Pages3-29
Number of pages27
Volume4
ISBN (Electronic)978-981-4616-37-9
ISBN (Print)978-981-4616-35-5
Publication statusPublished - 28 Aug 2014

Publication series

NameWorld Scientific-Now Publishers Series in Business
PublisherWorld Scientific Publishing Co Pte Ltd

Keywords

  • Price competition
  • concentration
  • pricing strategies
  • grocery retailing

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