View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Research Papers in Economics Working Paper 97-05 Advancing Knowledge About Processing, Distribution, The Retail Food Industry Center Sales, and Food Service University of Minnesota Printed Copy $22.50 NEW COMPETITION FOR SUPERMARKETS: A CASE STUDY Oral Capps, Jr. Department of Agricultural Economics Texas A&M University College Station, Texas 77843-2124 (409)845-8491 fax: (409)862-3019
[email protected] July 1997 Oral Capps, Jr., is a professor and faculty member of the Department of Agricultural Economics, Texas A&M University. This paper is part of the Organized Symposium entitled, “Changes in the Food Retail Industry” for the 1997 AAEA meetings in Toronto, Canada. The Retail Food Industry Center is an Alfred P. Sloan Foundation Industry Study Center. NEW COMPETITION FOR SUPERMARKETS: A CASE STUDY Oral Capps, Jr. Abstract Non-traditional retailers such as warehouse club stores, discount drug stores, and discount mass merchandisers are new competitors for traditional food retailers. It is expected that non- traditional retailers will account for roughly 14 percent of total grocery sales by the turn of the century. The impact of a particular discount mass merchandiser (Wal-Mart) on the sales of a conventional retail grocery outlet (David’s Supermarket, Inc.) located in the rural areas surrounding the Dallas/Ft. Worth metroplex is analyzed in this case study. In this case study, Wal-Mart alone is responsible for about a 17 percent reduction in sales. Key words: Warehouse Club Stores, Discount Mass Merchandisers, Supermarkets, Competition.