Competing With Costco And Sam's Club: Warehouse Club Entry And Grocery Prices

Provided by: National Bureau of Economic Research
Topic: Software
Format: PDF
Prior research shows grocery stores reduce prices to compete with Walmart Supercenters. This paper finds evidence that the competitive effects of two other big box retailers - Costco and Walmart-owned Sam's Club - are quite different. Using city-level panel grocery price data matched with a unique data set on Walmart and warehouse club locations, the authors find that Costco entry is associated with higher grocery prices at incumbent retailers, and that the effect is strongest in cities with small populations and high grocery store densities.

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