Local Price Competition: The Case of Swedish Food Retailers
2012
Gullstrand, J. (Joakim) | Jörgensen, Christian
Swedish food prices have been an issue many years resulting in a number of studies by the Swedish Competition Authority. This paper sheds new light on the competitive situation by using a detailed dataset covering all Swedish food retailers. The dataset allows an assessment of the importance of price competition as well as whether the market is local or global. The results are unambiguous, and suggest that competition is substantial, but that it wears off quickly. The implications are that a variation in competition may be an important explanation for price variations within Sweden, and that the disciplinary effect of new formats focusing on low prices may be substantial.
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