We investigate how buyer power in the retail market affects suppliers' profitability. Buyer power exists when suppliers depend on a concentrated set of retailers. Further, Wal-Mart, the world's largest retailer, possesses additional buyer power because it has a dominant position in many product...

The U.S. retail market exhibits increasing buyer concentration among larger retailers. As a result, the increasing clout may enable larger retailers to dictate terms from their suppliers. We utilize the major customer disclosure (SFAS 131) and focus on 150 suppliers who identify Wal-Mart as a...