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An Empirical Investigation of Wal-Mart’s Expansion into Food Retailing

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  • Alessandro Bonanno

    (University of Connecticut)

Abstract

This paper analyzes Wal-Mart’s expansion into food retailing, focusing on its store conversion strategy via a formal IO entry framework. Forty-eight different competing model specifications are considered to determine how the company perceives competition from incumbent food retailers and how its geographic expansion pattern has influenced its store differentiation decisions over time. The results show that Supercenter openings mainly have targeted large areas with low population density and a high percentage of population receiving food stamps. The results also suggest that as the company moves toward geographic saturation of local markets, some of the strategic location decisions creating economies of density may need to be reconsidered in future years.

Suggested Citation

  • Alessandro Bonanno, 2008. "An Empirical Investigation of Wal-Mart’s Expansion into Food Retailing," Food Marketing Policy Center Research Reports 105, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    • Handle: RePEc:zwi:fpcrep:105
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    File URL: http://fmpc.uconn.edu/publications/rr/rr105.pdf
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    References listed on IDEAS

    as
    1. Stephan J. Goetz & Hema Swaminathan, 2006. "Wal‐Mart and County‐Wide Poverty," Social Science Quarterly, Southwestern Social Science Association, vol. 87(2), pages 211-226, June.
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    Keywords

    http://fmpc.uconn.edu/publications/rr/rr105.pdf;

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other

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