Coupling weekly grocery transaction records with the exact location and opening date of entering Walmarts over an eleven year period, we examine how Supercenter entry affects prices and revenues at incumbent supermarkets. We find that entry within one mile of an incumbent causes a sharp 16% drop...

This paper proposes and tests a model of supermarket competition based upon John Sutton's (1991) endogenous fixed cost (EFC) framework. The relevance of the EFC framework to supermarket competition stems from the industry's surprisingly uniform competitive structure: irrespective of the size of...