The impacts of competitive entry on pricing in the Finnish retail grocery market
International Journal of Retail & Distribution Management
ISSN: 0959-0552
Article publication date: 27 February 2007
Abstract
Purpose
The purpose of this paper is to explore the impacts that a new retailer entering a previously stable market has on the domestic retailers' pricing behaviour. The paper describes and analyses the context of the entry of the hard discounter chain Lidl into the Finnish market.
Design/methodology/approach
To illustrate the effects of competitive entry on pricing behaviour of competitors, prices of 20 grocery items were collected from three different chains and three market areas in three different points of time. Based on these data the pricing initiatives of the entrant and the reactions of the domestic competitors are described and analysed in terms of four dimensions: competition, geographical, assortment, and time.
Findings
The analysis reveals that the domestic retailers reacted to the intensifying price competition by engaging in selective price changes. Both price cuts and price increases were detected.
Originality/value
The paper provides empirical insights about the impacts of intensifying competition on pricing.
Keywords
Citation
Uusitalo, O. and Rökman, M. (2007), "The impacts of competitive entry on pricing in the Finnish retail grocery market", International Journal of Retail & Distribution Management, Vol. 35 No. 2, pp. 120-135. https://doi.org/10.1108/09590550710728084
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited