nov 04

Distorted Competition: Below-cost Legislation, ‘Marges Arrie`re’ and Prices in French Retailing

Introduction
In France, the prices of major industrial brands have been rising for a number of years, while the price differential between these brands on the one hand and those of retailer brands and no-frills products on the other has widened. Moreover, the price differential between supermarkets and hypermarkets on the one hand and hard discount stores on the other has increased, leading to a loss of market share held by traditional supermarkets and hypermarkets, in favour of hard discount stores, which are experiencing rapid growth.
     Some retailers and manufacturers, as well as several experts, attribute these consequences to commercial legislation currently in force in France, in particular the Raffarin and Galland laws.
Three questions over this can be raised: does such a cause-effect relationship in fact exist? How is it apparent? Which business and marketing models can be used to clarify this relationship?
     This article aims to formulate an answer to these questions. In order to do so, it will refer to an analysis of economic, strategic and marketing literature, as well as professional surveys, statistical data, an analysis of the balance sheets of the main retail groups and interviews with professionals.
First, we will present the French legislation prohibiting below-cost selling, then we will explain its consequences and show data confirming our interpretation. Finally we will conclude and present limitations of our paper and directions for further research.

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nov 04

Research and managerial issues on global retail competition: Carrefour/Wal-Mart

In recent years, two major retailers have been in the headlines of the specialised press, namely Wal-Mart and Carrefour-Promodès.
According to the most recent rankings, they are, respectively, numbers one and two in the world in terms of turnover and employment.
The irresistible ascension of these two giants brilliantly illustrates the argument surrounding the worldwide low price challenge (Colla and Dupuis, 1997) of which they have been and continue to be among the most ardent supporters. It also symbolises the internationalisation of the competitive battlefield in a sector where the combatants have been waging battle on a local level for a much longer time than has been the case in industrial sectors.

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nov 04

International expansion and strategies of discount grocery retailers: the winning models

Introduction
Discount food retailing has experienced considerable expansion over the last ten years and currently occupies an important position in the European retail industry. However, a certain number of discount retailers have had to abandon the market over the same period, while others have obtained good results both in their domestic markets and abroad.
    The purpose of this article is to illustrate the determining reasons behind the success or failure of discount retailers on the international scene through the identification and analysis of the various strategic groups, competitive advantages, entry barriers to the sector and barriers to mobility between the groups.
    These concepts, well documented in general business strategy literature (Porter,1980, 1985), have not been used very often in the analysis of the retail distribution sector, particularly at the international level (Burt,2002). This article takes into consideration this literature and, concerning the data used, this is essentially based on documentary research that took in the main trade magazines and professional journals, as well as published surveys and studies of the sector and analysis of individual companies. During the course of research, the author extended research to company documents, balance sheets and activity reports, and also interviewed company executives whose contributions enabled a better identification of the groups and individual company strategies and the elaboration of the hypotheses put forward in this article.

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