After revolutionizing the concept of mass merchandising with its Discount Stores, Wal-Mart has entered food retailing with its Supercenters, and has become the largest food retailer in the United States. Despite its relevance, little empirical research has focused on explaining the company's...

This paper investigates the effect of in-store services on retail food prices, supermarket competition, and demand using fluid milk as a case study. It is shown that higher-service supermarkets charge higher milk prices essentially because of an increase in market power due to differentiation of...