Izvorni znanstveni članak
https://doi.org/10.1080/1331677X.2021.1962384
Format blurring: how the advent of the Walmart Supercenter has changed the U.S. grocery industry
Dae-Yong Ahn
Hwan Chung
Sažetak
This paper develops a game-theoretic model that analyzes how a
grocery store responds to the entry of a Walmart Supercenter
using its store-format choice. By adopting a set of realistic
assumptions, such as the cost advantage of Walmart and differentiated services of grocery stores, we find that the distance to a
Walmart Supercenter is a key moderating factor in the store-format choice of grocery stores. Grocery stores would prefer to
sell non-food items, but when sufficiently close to Walmart
Supercenters they would specialise in food items, as consumers
find it less costly to engage in two-stop shopping, making the
gain from non-food items smaller. So an asymmetric equilibrium
becomes feasible, wherein grocery stores carrying increasingly
more non-food products and a new grocery store concept like
Whole Foods and Wild Oats emphasising high-quality, organic
foods can coexist. Our results yield important managerial implications. Under the specialisation strategy, the quality of its differentiated services should be sufficiently high, at least two to four
times the disutility of two-stop shopping. Under the expansion
strategy, grocery stores should engage in loss leadership, pricing
non-food items below cost to lure large-basket consumers while
earning higher margins from food items to compensate for
the loss.
Ključne riječi
Format blurring; Walmart; grocery store; store-format choice; specialisation; expansion
Hrčak ID:
302043
URI
Datum izdavanja:
31.3.2023.
Posjeta: 939 *