The Effect of Wal-Mart Supercenters on Grocery Prices in New England |
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| Authors: | Richard J Volpe III and Nathalie Lavoie |
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| Institution: | Richard J. Volpe III is a Ph.D. student, Department of Agricultural and Resource Economics, University of California, Davis.;
Nathalie Lavoie is Assistant Professor, Department of Resource Economics, University of Massachusetts, Amherst. |
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| Abstract: | The competitive price effect of Wal-Mart Supercenters on national brand and private label grocery prices in New England is examined. We use primary price data collected on several identical products from six Supercenters in Massachusetts, Connecticut, and Rhode Island and from conventional supermarkets. Taking into account demographics, store characteristics, and market conditions, we show that Wal-Mart decreases prices by 6 to 7% for national brand goods and by 3 to 8% for private label goods. Price decreases are most significant in the dry grocery and dairy departments. Moreover, Wal-Mart sets grocery prices significantly lower than its competitors. |
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