Evaluating a Supermarket Merger Event: The Case of Copps and Kohl's in Madison WI

This paper presents research on the merger of Copps and Kohl's supermarkets in the city of Madison, Wisconsin. A distinct feature of our data, collected from MarchSeptember of 2003 and 2005, is that it allowed us to assemble price and promotion information for all major competitors in Madison's supermarket sector. With both preand post- merger information, the research provides empirical evidence of how acquiring and non-acquiring firms responded to an important structural shock. In 2003 when the merger took place, we found no evidence of merger-induced price increases and our findings were consistent with short-term battle for market share. In the long-run (i.e. 2005), we found that the acquiring firm used the merger to raise prices in Madison.