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The Impact Of Big-Box Stores On Retail Food Prices And The Consumer Price Index

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  • Leibtag, Ephraim S.

Abstract

Over the past 10 years, the growth of nontraditional retail food outlets has transformed the food market landscape, increasing the variety of shopping and food options available to consumers, as well as price variation in retail food markets. This report focuses on these dynamics and how they affect food price variation across store format types. The differences in prices across store formats are especially noteworthy when compared with standard measures of food price inflation over time. Over the past 20 years, annual food price changes, as measured by the Consumer Price Index (CPI), have averaged just 3 percent per year, while food prices for similar products can vary by more than 10 percent across store formats at any one point in time. Since the current CPI for food does not fully take into account the lower price option of nontraditional retailers, a gap exists between price change as measured using scanner data versus the CPI estimate, even for the relatively low food inflation period of 1998-2003.

Suggested Citation

  • Leibtag, Ephraim S., 2006. "The Impact Of Big-Box Stores On Retail Food Prices And The Consumer Price Index," Economic Research Report 7238, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:7238
    DOI: 10.22004/ag.econ.7238
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    File URL: https://ageconsearch.umn.edu/record/7238/files/er070033.pdf
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    References listed on IDEAS

    as
    1. MacDonald, James M., 1995. "Consumer Price Index Overstates Food-Price Inflation," Food Review/ National Food Review, United States Department of Agriculture, Economic Research Service, vol. 18(3), September.
    2. Kaufman, Phillip R. & MacDonald, James M. & Lutz, Steve M. & Smallwood, David M., 1997. "Do the Poor Pay More for Food? Item Selection and Price Differences Affect Low-Income Household Food Costs," Agricultural Economic Reports 34065, United States Department of Agriculture, Economic Research Service.
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    Cited by:

    1. Andrews, Margaret S. & Bhatta, Rhea & Ver Ploeg, Michele, 2012. "Did the American Recovery and Reinvestment Act Increase in SNAP Benefits Reduce the Impact of Food Deserts?," 2012 AAEA/EAAE Food Environment Symposium 123520, Agricultural and Applied Economics Association.
    2. Ver Ploeg, Michele & Breneman, Vince & Dutko, Paula & Williams, Ryan & Snyder, Samantha & Dicken, Chris & Kaufman, Phillip, 2012. "Access to Affordable and Nutritious Food: Updated Estimates of Distance to Supermarkets Using 2010 Data," Economic Research Report 262227, United States Department of Agriculture, Economic Research Service.
    3. repec:rre:publsh:v:37:y:2007:i:2:p:251-78 is not listed on IDEAS
    4. Leibtag, Ephraim S. & Barker, Catherine & Dutko, Paula, 2010. "How Much Lower Are Prices at Discount Stores? An Examination of Retail Food Prices," Economic Research Report 96767, United States Department of Agriculture, Economic Research Service.
    5. Muth, Mary K. & Sweitzer, Megan & Brown, Derick & Capogrossi, Kristen & Karns, Shawn A. & Levin, David & Okrent, Abigail & Siegel, Peter & Zhen, Chen, 2016. "Understanding IRI Household-Based and Store-Based Scanner Data," Technical Bulletins 234905, United States Department of Agriculture, Economic Research Service.
    6. Kuchler, Fred & Stewart, Hayden, 2008. "Price Trends Are Similar for Fruits, Vegetables, and Snack Foods," Economic Research Report 56447, United States Department of Agriculture, Economic Research Service.

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