Consumer Shopping and Spending Across Retail Formats

We present an empirical study of household shop- ping and packaged goods spending across retail for- mats—grocery stores, mass merchandisers, and drug stores. Our study assesses competition be- tween formats and ex- plores how retailers’ as- sortment, pricing, and promotional policies, as well as household demo- graphics, affect shopping behavior. We find that consumer expenditures respond more to varying levels of assortment (in particular at grocery stores) and promotion than price. We also find that households that shop more at mass merchan- disers also shop more in all other formats, sug- gesting that visits to mass merchandisers do not substitute for trips to the grocery store.