Antitrust & Competition Policy Blog

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

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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