Investigators:
Timothy J. Richards (Project Director, Arizona State University)
Elliot Rabinovich (Arizona State University)
Lina Wang (Pennsylvania State University)

Project Summary:
Recent inflationary pressures have raised concerns regarding competition in the U.S. food retailing industry. Promoting a competitive environment in this industry is of vital importance to the economy. However, public policy measures tend to ignore the details of how competition among firms is borne out in practice.  In the actual exercise of managerial policy in the food retailing sector, for instance, managers tend to be hyper-focused on competitive strategies on many levels, and consider far more than just the prices and wages that tend to be the focus of policy makers. In the proposed research, we intend to gain a better understanding of some of these strategies and how they could supplement public policy initiatives. Our objectives are to: (1) study how retailers combine inventory and pricing strategies to compete and whether these strategies are conducive to greater efficiency; (2) investigate how prices for products flowing through food supply chains are reflective of resilience in addition to competitiveness; (3) estimate the competitive impact on sales outcomes of retail partnerships with online grocery delivery platforms and draw competitive implications regarding retailers’ use of these platforms (as opposed to using internal resources) to facilitate food distribution; (4) examine the impact on competition, as reflected in prices and profitability, caused by distribution channel relationship asymmetry among rival food suppliers; and (5) synthesize our results to develop a set of solutions. Our research will contribute to theoretical, methodological, and empirical literatures on food distribution, supply chain management, retail markets, and pricing outcomes.

Funding Information:
U.S. Department of Agriculture; Agriculture and Food Research Initiative