Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, November 15, 2012

The Competitive Impact of Hypermarket Retailers on Gasoline Prices

Posted by D. Daniel Sokol

Paul R. Zimmerman (FTC) has a really interesting article on The Competitive Impact of Hypermarket Retailers on Gasoline Prices.

ABSTRACT: Hypermarkets are large retail suppliers of general merchandise or grocery items that also sell gasoline, often at very low margins. This paper estimates the impact of hypermarkets on average state-level retail gasoline prices and margins. The empirical results indicate an economically and statistically significant price-decreasing effect of increased hypermarket competition. The estimations also suggest that refiners lower the delivered wholesale prices charged to their affiliated lessee-dealer and open-dealer stations in response to increased hypermarket competition, which in turn translates to lower retail (street) prices. The adoption of sales-below-cost laws may lessen the price-reducing effects from hypermarket competition.

http://lawprofessors.typepad.com/antitrustprof_blog/2012/11/the-competitive-impact-of-hypermarket-retailers-on-gasoline-prices.html

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