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The Price and Profit Performance of Leading Food Chains

Author

Listed:
  • Bruce W. Marion
  • Willard F. Mueller
  • Ronald W. Cotterill
  • Frederick E. Geithman
  • John R. Schmelzer

Abstract

The net profits and grocery prices of large food chains were found to be positively and significantly related to market concentration and a chain's relative market share. The results refute the notion that higher profits for dominant firms in concentrated markets are due to efficiency and lower costs. Increased profits in noncompetitively structured markets accounted for about one-third of the increase in prices. Higher retailer costs in noncompetitive markets appear to stem from inefficiencies and cost increasing forms of competition.

Suggested Citation

  • Bruce W. Marion & Willard F. Mueller & Ronald W. Cotterill & Frederick E. Geithman & John R. Schmelzer, 1979. "The Price and Profit Performance of Leading Food Chains," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(3), pages 420-433.
    • Handle: RePEc:oup:ajagec:v:61:y:1979:i:3:p:420-433.
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    File URL: http://hdl.handle.net/10.2307/1239428
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    Citations

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    Cited by:

    1. Buccola, Steven T., 1989. "Pricing Efficiency In Agricultural Markets: Issues, Methods, And Results," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(1), pages 1-11, July.
    2. Kenji Matsui, 2010. "Effects of wholesaler concentration on retailers by format: evidence from Japanese brand-level price data," Applied Economics, Taylor & Francis Journals, vol. 42(18), pages 2379-2391.
    3. Schupp, Alvin R. & Dennis, Winston, 1989. "Concentration Of Food Retailing In Louisiana," Journal of Food Distribution Research, Food Distribution Research Society, vol. 20(1), pages 1-7, February.
    4. Rahkovsky Ilya & Volpe Richard, 2018. "Structure and Food Price Inflation," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 16(1), pages 1-16, January.
    5. Kyle W. Stiegert & Todd Sharkey, 2007. "Food pricing, competition, and the emerging supercenter format," Agribusiness, John Wiley & Sons, Ltd., vol. 23(3), pages 295-312.
    6. Weaver, Robert D. & Chattin, Peter & Banerjee, Aniruddha, 1989. "Market Structure And The Dynamics Of Retail Food Prices," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 18(2), pages 1-11, October.
    7. Montoya, Cristobal Gerardo, 1982. "The impact of slaughter plant closings on producer prices," ISU General Staff Papers 1982010108000018044, Iowa State University, Department of Economics.
    8. Siegfried, John J. & Latta, Christopher, 1998. "Competition in the Retail College Textbook Market," Economics of Education Review, Elsevier, vol. 17(1), pages 105-115, February.

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