Structure and Food Price Inflation

Abstract

AbstractWe pair Nielsen TDLinx data, 2004–2014, with Consumer Price Index data to investigate how changes in food retail market structure drive food price inflation. We find, in corroboration with much of the evidence to date, that market concentration is positively and significantly associated with higher food prices. We find the same to be true for store format concentration, or the homogeneity of food markets. As the market shares, or penetration, of supercenters, warehouse stores, limited assortment stores, and superettes increase at expense of traditional supermarkets, food price inflation decreases.