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Retailers Price Behavior in the UK Fresh Fruit and Vegetable Market

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  • Cesar Revoredo‐Giha
  • Alan Renwick

Abstract

The purpose of this paper is to study the price behaviour of fresh produce at the retail level of two leading supermarkets, Tesco and Sainsbury, with the purpose of gaining knowledge about their interaction. We focus the study on six products from the fresh fruits and vegetable group (i.e., tomatoes, Bramley’s apples, white cabbage, cucumbers, Iceberg lettuce and Round lettuce) due to the fact on the one hand it is a less complex supply chain (e.g., perishable product, less number of intermediaries) and on the other hand, because during the last 20 years the group has significantly evolved with supermarkets becoming the major players in the chain. The empirical methodology consisted of using Granger causality tests to establish the relationship between the series (e.g., leader-follower) and then vector autoregressive (VAR) models and variance decomposition procedures to capture the interaction of supermarket prices by product. Overall results indicate that the competition behaviour amongst the two retailers changes by product and evolve over time
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Suggested Citation

  • Cesar Revoredo‐Giha & Alan Renwick, 2012. "Retailers Price Behavior in the UK Fresh Fruit and Vegetable Market," Agribusiness, John Wiley & Sons, Ltd., vol. 28(4), pages 451-468, September.
    • Handle: RePEc:wly:agribz:v:28:y:2012:i:4:p:451-468
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    References listed on IDEAS

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    1. Douglas Cooper, 2003. "Findings from the Competition Commission's Inquiry into Supermarkets," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 127-143, March.
    2. Paul Wilson, 2003. "Papers from a Mini‐symposium on Competition in the Food Industry: An Introduction," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 85-87, March.
    3. Ronald W. Cotterill, 1997. "The food distribution system of the future: Convergence towards the US or UK model?," Agribusiness, John Wiley & Sons, Ltd., vol. 13(2), pages 123-135.
    4. Lutkepohl, Helmut & Reimers, Hans-Eggert, 1992. "Impulse response analysis of cointegrated systems," Journal of Economic Dynamics and Control, Elsevier, vol. 16(1), pages 53-78, January.
    5. Ian Sheldon & Richard Sperling, 2003. "Estimating the Extent of Imperfect Competition in the Food Industry: What Have We Learned?," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(1), pages 89-109, March.
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    Cited by:

    1. Dengjun Zhang & Geir Sogn-Grundvåg & Frank Asche & James A. Young, 2018. "Eco-Labeling and Retailer Pricing Strategies: The U.K. Haddock Market," Sustainability, MDPI, vol. 10(5), pages 1-13, May.
    2. Angela S. Bergantino & Claudia Capozza & Mauro Capurso, 2018. "Pricing strategies: who leads and who follows in the air and rail passenger markets in Italy," Applied Economics, Taylor & Francis Journals, vol. 50(46), pages 4937-4953, October.
    3. Sang-Hyun Kim & Hao Lan & Paul W Dobson, 2021. "Identifying price-leadership structures in oligopoly," Oxford Economic Papers, Oxford University Press, vol. 73(1), pages 350-370.
    4. Hao Lan & Paul W. Dobson, 2017. "Healthy Competition to Support Healthy Eating? An Investigation of Fruit and Vegetable Pricing in UK Supermarkets," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 881-900, September.
    5. Revoredo-Giha, Cesar, 2015. "Retailers' Promotions: What Role Do They Play in Household Food Purchases by Degree of Food Access in Scotland?," 148th Seminar, November 30-December 1, 2015, The Hague, The Netherlands 229275, European Association of Agricultural Economists.
    6. Balaguer, Jacint & Ripollés, Jordi, 2018. "The dynamics pattern of price dispersion in retail fuel markets," Energy Economics, Elsevier, vol. 74(C), pages 546-564.
    7. Rohe, Sebastian & Oltmer, Marie & Wolter, Hendrik & Gmeiner, Nina & Tschersich , Julia, 2022. "Forever Niche: Why do organic vegetable varieties not diffuse?," Papers in Innovation Studies 2022/8, Lund University, CIRCLE - Centre for Innovation Research.
    8. Kai Yin Woo & Shu Kam Lee, 2018. "Price convergence in the UK supermarket chains: Evidence from nonlinear cointegration approach," Economics and Business Letters, Oviedo University Press, vol. 7(3), pages 115-125.

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