A Model of Competition between Mom-and-Pops and Supermarkets with Heterogeneous Goods

A Model of Competition between Mom-and-Pops and Supermarkets with Heterogeneous Goods | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article A Model of Competition between Mom-and-Pops and Supermarkets with Heterogeneous Goods Juwon Kwak, Pascal Mossay This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-2087441/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Consumers have access to a larger range of goods when shopping at large-scale supermarkets. One-stop shopping provides supermarkets with a competitive advantage over mom-and-pops as demand-side economies of scope allow consumers to save on traveling costs. The purchase frequency of goods, an often-neglected factor in the literature, affects the competition among stores as more frequently purchased goods involve more trips and, therefore, higher traveling costs. We set up a model of spatial competition between a large supermarket and mom-and-pop selling goods of different purchase frequencies by relaxing the one-stop shopping assumption. Mom-and-pops’ profit function is shown to be supermodular and expresses the complementarity between the purchase frequency of the good and access to consumers. Competition in the land market leads mom-and-pops to locate close to consumers and to sort across locations in descending order of the purchase frequency of the good they are selling, while the supermarket is located further away, where land is cheaper. Furthermore, we also show that mom-and-pops, selling seldomly-purchased goods, are more exposed to competition with the supermarket and are eventually driven out of the market. purchase frequency supermarket mom-and-pop retail industry JEL Code: L11 R12 L25 Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-2087441","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":138732377,"identity":"0269fa9a-e017-4af3-8949-f8a8a1943018","order_by":0,"name":"Juwon Kwak","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA1ElEQVRIiWNgGAWjYBACxgYQeYCBQYK9DSrEQ7QWnmNEaoEAkBaJNCK1MM/IMXxccOawvOTMZ2mPeRjs5Bl4zj7A77AZOcbGM24cNpwtnXbcmIch2bCBt92AgJbcbdI8H24zzpNOb5PmYWBOYOBnw+8wmBb7eZLHQVrqidVy43bibAm2Y0AthxMYeNsIaOl5/9mY58z/5Jk9aWmScwyOG7bBQxsHMGxPS3zMcyzNdsbxY2YSbyqq5fl50ghoaUDhAsOKgE8YGOQJKRgFo2AUjIJRwAAAnRk+tVEgZa8AAAAASUVORK5CYII=","orcid":"","institution":"Kyungpook National University","correspondingAuthor":true,"submittingAuthor":false,"prefix":"","firstName":"Juwon","middleName":"","lastName":"Kwak","suffix":""},{"id":138732379,"identity":"a007d8dd-9f01-4802-9256-4b15ce3f18ad","order_by":1,"name":"Pascal Mossay","email":"","orcid":"","institution":"Kyungpook National University","correspondingAuthor":false,"submittingAuthor":false,"prefix":"","firstName":"Pascal","middleName":"","lastName":"Mossay","suffix":""}],"badges":[],"createdAt":"2022-09-21 06:29:15","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-2087441/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-2087441/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":29269005,"identity":"127c7534-efe4-43cc-acc5-0df9b8638f3f","added_by":"auto","created_at":"2022-11-19 03:44:31","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":377739,"visible":true,"origin":"","legend":"","description":"","filename":"20220807AModelofCompetitionbetweenMomPascal.pdf","url":"https://assets-eu.researchsquare.com/files/rs-2087441/v1_covered.pdf"},{"id":27038428,"identity":"6fc74f39-9e50-4687-8cd9-718ddb328063","added_by":"auto","created_at":"2022-09-27 15:44:08","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":372080,"visible":true,"origin":"","legend":"","description":"","filename":"20220807AModelofCompetitionbetweenMomPascal.pdf","url":"https://assets-eu.researchsquare.com/files/rs-2087441/v1_covered.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"A Model of Competition between Mom-and-Pops and Supermarkets with Heterogeneous Goods","fulltext":[{"header":"Full Text","content":"This preprint is available for \u003ca href='/article/rs-2087441/latest.pdf' target='_blank'\u003edownload as a PDF\u003c/a\u003e."}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"purchase frequency, supermarket, mom-and-pop, retail industry JEL Code: L11, R12, L25","lastPublishedDoi":"10.21203/rs.3.rs-2087441/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-2087441/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eConsumers have access to a larger range of goods when shopping at large-scale supermarkets. One-stop shopping provides supermarkets with a competitive advantage over mom-and-pops as demand-side economies of scope allow consumers to save on traveling costs. The purchase frequency of goods, an often-neglected factor in the literature, affects the competition among stores as more frequently purchased goods involve more trips and, therefore, higher traveling costs. We set up a model of spatial competition between a large supermarket and mom-and-pop selling goods of different purchase frequencies by relaxing the one-stop shopping assumption. Mom-and-pops\u0026rsquo; profit function is shown to be supermodular and expresses the complementarity between the purchase frequency of the good and access to consumers. Competition in the land market leads mom-and-pops to locate close to consumers and to sort across locations in descending order of the purchase frequency of the good they are selling, while the supermarket is located further away, where land is cheaper. 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