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Slotting Allowances and Scarce Shelf Space

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  • Leslie M. Marx
  • Greg Shaffer

Abstract

Slotting allowances are payments made by manufacturers to obtain retail shelf space. They are widespread in the grocery industry and a concern to antitrust authorities. A popular view is that slotting allowances arise because there are more products than retailers can profitably carry given their shelf space. We show that the causality can also go the other way: the scarcity of shelf space may in part be due to the feasibility of slotting allowances. It follows that slotting allowances can be anticompetitive even if they have no effect on retail prices.

Suggested Citation

  • Leslie M. Marx & Greg Shaffer, 2010. "Slotting Allowances and Scarce Shelf Space," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(3), pages 575-603, September.
    • Handle: RePEc:bla:jemstr:v:19:y:2010:i:3:p:575-603
    DOI: 10.1111/j.1530-9134.2010.00262.x
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    References listed on IDEAS

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