Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/236679 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9137
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
We study the effect of a merger between two Dutch supermarket chains to assess its effect on the depth as well as composition of assortment. We adopt a difference-in-differences strategy that exploits local variation in the merger’s effects, controlling for selection on observables through a matching procedure when defining our control group. We show that the merger led the merging parties to reposition their assortment to avoid cannibalization in the areas where they directly competed before the merger. While the low-variety target’s stores reduced the depth of their assortment when in direct competition with the acquirer, the latter increased their assortment. This suggests that variety is a strategic variable in retail chains’ response to changes in local competition.
Subjects: 
variety
assortment
mergers
ex-post evaluation
retail sector
supermarkets
grocery
JEL: 
L10
L41
L66
L81
D22
K21
C23
Document Type: 
Working Paper
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