Market power analysis in the retail food industry: a survey of methods

The present paper surveys various methods used to analyse market power in the retail food industry. The strengths and weaknesses of these approaches are explored and a review of the issues in using New Empirical Industrial Organization (NEIO) and time–series models is provided. The absence of a theory underlying time–series models is highlighted and a review of some theoretical models in retailing is presented. The impact of imperfect competition in the food processing sector on retailing is also examined. It is argued that a combination of the approaches that minimises the weaknesses and builds on the strengths of single approaches may prove more promising for examining non–competitive behaviour.