IDEAS home Printed from https://ideas.repec.org/a/kap/jincot/v20y2020i1d10.1007_s10842-019-00316-1.html
   My bibliography  Save this article

Shopping Hours and Entry - an Empirical Analysis of Aldi’s Opening Hours

Author

Listed:
  • Samuel Haas

    (Justus-Liebig-University, Chair for Industrial Organization, Regulation and Antitrust)

  • Daniel Herold

    (Justus-Liebig-University, Chair for Industrial Organization, Regulation and Antitrust)

  • Jan T. Schäfer

    (Justus-Liebig-University, Chair for Industrial Organization, Regulation and Antitrust)

Abstract

Aldi, the biggest discounter in Germany, started to systematically extend shopping hours of its stores in 2016. We interpret the decision to extend opening hours of a specific Aldi store as entry into a new market. By using a novel data set containing the opening hours of nearly all German grocery retailers, we find the following interesting correlations: The probability that a given Aldi outlet extends its shopping hours past 8 p.m. (i) increases if nearby Aldi outlets already extended shopping hours and (ii) decreases if nearby stores run by Aldi’s close competitors did not expand shopping hours past 8 p.m.. These results seem surprising in conjunction with cannibalization and residual demand, but can be explained by consumer and firm learning or market expansion.

Suggested Citation

  • Samuel Haas & Daniel Herold & Jan T. Schäfer, 2020. "Shopping Hours and Entry - an Empirical Analysis of Aldi’s Opening Hours," Journal of Industry, Competition and Trade, Springer, vol. 20(1), pages 139-156, March.
    • Handle: RePEc:kap:jincot:v:20:y:2020:i:1:d:10.1007_s10842-019-00316-1
    DOI: 10.1007/s10842-019-00316-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10842-019-00316-1
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10842-019-00316-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Otto Toivanen & Michael Waterson, 2005. "Market Structure and Entry: Where's the Beef?," RAND Journal of Economics, The RAND Corporation, vol. 36(3), pages 680-699, Autumn.
    2. Inderst, Roman & Irmen, Andreas, 2005. "Shopping hours and price competition," European Economic Review, Elsevier, vol. 49(5), pages 1105-1124, July.
    3. Avinash Dixit, 1979. "A Model of Duopoly Suggesting a Theory of Entry Barriers," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 20-32, Spring.
    4. Mai Yamada, 2019. "Business Hours, Store Quality, and Social Welfare," Journal of Industry, Competition and Trade, Springer, vol. 19(3), pages 465-478, September.
    5. Kosfeld, Michael, 2002. "Why shops close again: An evolutionary perspective on the deregulation of shopping hours," European Economic Review, Elsevier, vol. 46(1), pages 51-72, January.
    6. Avner Shaked & John Sutton, 1990. "Multiproduct Firms and Market Structure," RAND Journal of Economics, The RAND Corporation, vol. 21(1), pages 45-62, Spring.
    7. Shy, Oz & Stenbacka, Rune, 2006. "Service hours with asymmetric distributions of ideal service time," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 763-771, July.
    8. Berry, Steven T, 1992. "Estimation of a Model of Entry in the Airline Industry," Econometrica, Econometric Society, vol. 60(4), pages 889-917, July.
    9. Ellickson, Paul B., 2006. "Quality competition in retailing: A structural analysis," International Journal of Industrial Organization, Elsevier, vol. 24(3), pages 521-540, May.
    10. Paul B. Ellickson & Sanjog Misra, 2011. "Structural Workshop Paper --Estimating Discrete Games," Marketing Science, INFORMS, vol. 30(6), pages 997-1010, November.
    11. de Meza, David, 1984. "The Fourth Commandment: Is it Pareto Efficient?," Economic Journal, Royal Economic Society, vol. 94(374), pages 379-383, June.
    12. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    13. Ellickson, Paul B. & Grieco, Paul L.E., 2013. "Wal-Mart and the geography of grocery retailing," Journal of Urban Economics, Elsevier, vol. 75(C), pages 1-14.
    14. Konishi, Hideo, 2005. "Concentration of competing retail stores," Journal of Urban Economics, Elsevier, vol. 58(3), pages 488-512, November.
    15. Smiley, Robert, 1988. "Empirical evidence on strategic entry deterrence," International Journal of Industrial Organization, Elsevier, vol. 6(2), pages 167-180.
    16. J. Stephen Ferris, 1990. "The Economics of Regulated Early Closing Hours: Some Evidence From Ontario," Carleton Economic Papers 90-02, Carleton University, Department of Economics, revised Aug 1991.
    17. Clemenz, Gerhard, 1990. "Non-sequential consumer search and the consequences of a deregulation of trading hours," European Economic Review, Elsevier, vol. 34(7), pages 1323-1337, November.
    18. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    19. Raymond Gradus, 1996. "The economic effects of extending shop opening hours," Journal of Economics, Springer, vol. 64(3), pages 247-263, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yamada, Mai, 2020. "The Regulation Level of Business Hours," MPRA Paper 101392, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Samuel de Haas & Daniel Herold & Jan T. Schaefer, 2017. "Shopping hours and entry - An empirical analysis of Aldi's opening hours," MAGKS Papers on Economics 201751, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    2. Inderst, Roman & Irmen, Andreas, 2005. "Shopping hours and price competition," European Economic Review, Elsevier, vol. 49(5), pages 1105-1124, July.
    3. repec:bla:germec:v:11:y:2010:i::p:511-526 is not listed on IDEAS
    4. Tobias Wenzel, 2010. "Liberalization of Opening Hours with Free Entry," German Economic Review, Verein für Socialpolitik, vol. 11(4), pages 511-526, November.
    5. Elbert Dijkgraaf & Raymond Gradus, 2007. "Explaining Sunday Shop Policies," De Economist, Springer, vol. 155(2), pages 207-219, June.
    6. Svetoslav Danchev & Christos Genakos, 2015. "Evaluating the Impact of Sunday Trading Deregulation," CEP Discussion Papers dp1336, Centre for Economic Performance, LSE.
    7. Yamada, Mai, 2020. "The Regulation Level of Business Hours," MPRA Paper 101392, University Library of Munich, Germany.
    8. Habte, Osmis, 2017. "Opening Hours Decision and Competition in the Motor Vehicle Inspection Market," Working Papers 2017:20, Lund University, Department of Economics.
    9. Shy, Oz & Stenbacka, Rune, 2006. "Service hours with asymmetric distributions of ideal service time," International Journal of Industrial Organization, Elsevier, vol. 24(4), pages 763-771, July.
    10. Mai Yamada, 2019. "Business Hours, Store Quality, and Social Welfare," Journal of Industry, Competition and Trade, Springer, vol. 19(3), pages 465-478, September.
    11. Toivanen, Otto & Waterson, Michael, 2000. "Empirical research on discrete choice game theory models of entry: An illustration," European Economic Review, Elsevier, vol. 44(4-6), pages 985-992, May.
    12. Wenzel, Tobias, 2007. "Liberalization of Opening Hours with Free Entry," Ruhr Economic Papers 13, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Paul, Annemarie, 2015. "After work shopping? Employment effects of a deregulation of shop opening hours in the German retail sector," European Economic Review, Elsevier, vol. 80(C), pages 329-353.
    14. Michael C Burda & Philippe Weil, 2004. "Blue Laws," SciencePo Working papers Main hal-01065499, HAL.
    15. Raymond Gradus, 1996. "The economic effects of extending shop opening hours," Journal of Economics, Springer, vol. 64(3), pages 247-263, October.
    16. Yamada, Mai, 2014. "Opening Hours and Quality Choices," MPRA Paper 56066, University Library of Munich, Germany.
    17. Oz Shy & Rune Stenbacka, 2008. "Price Competition, Business Hours and Shopping Time Flexibility," Economic Journal, Royal Economic Society, vol. 118(531), pages 1171-1195, August.
    18. Roberto Felici & Marcello Pagnini, 2008. "Distance, Bank Heterogeneity And Entry In Local Banking Markets," Journal of Industrial Economics, Wiley Blackwell, vol. 56(3), pages 500-534, September.
    19. Castellari Elena & Bonanno Alessandro & Sckokai Paolo, 2019. "Food Retail Liberalization, Food Retail Structure and Food Prices: The Italian Case," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 17(2), pages 1-11, November.
    20. Yamada, Mai, 2014. "Opening Hours, Store Quality, and Social Welfare," MPRA Paper 84105, University Library of Munich, Germany, revised 01 Nov 2017.
    21. Chenarides, Lauren & Jaenicke, Edward C., 2016. "Store Choice and Consumer Behavior in Food Deserts: An Empirical Application of the Distance Metric Method," 2017 Allied Social Sciences Association (ASSA) Annual Meeting, January 6-8, 2017, Chicago, Illinois 250118, Agricultural and Applied Economics Association.

    More about this item

    Keywords

    Shopping hours; Retailing; Coordination; Market entry;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jincot:v:20:y:2020:i:1:d:10.1007_s10842-019-00316-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.