The purpose of this research project is to conduct a dynamic analysis of demand and market structure in retail food.
||Matilda Orth and Florin Maican, IFN and University of Gothenburg
A substantial share of investments in retail markets aim to increase the degree of differentiation between stores that differ in terms of size, geographic location, service, etc. Along with the trend toward larger but fewer stores there has been a recent emphasis on developing smaller store formats that are geographically close to the consumer.
The project combines newly developed theoretical models and statistical methods with a unique database covering all retail food stores in Sweden during the period 2001–2010. First, we investigate how consumers choose and value different store formats. Second, we analyze firm strategies and estimate costs to enter and exit stores in local markets. A key contribution of the project is that we simulate the development of the retail food market under a number of hypothetical changes. In particular, we evaluate the effects of changing the number of store formats in local markets and quantify how store profits are affected by higher costs for land and buildings.
The project is financed by the Swedish Retail and Wholesale Development Council.
Orth, Matilda and Florin Maican (2013), "Entry Regulations, Product Differentiation and Determinants of Market Structure". IFN Workinig Paper No. 984.
Orth, Matilda and Florin Maican (2012), "Marknadsstruktur och dynamik i dagligvaruhandeln". Ekonomisk Debatt 40 (1), 11–15.