Alternative ways to measure market concentration in the grocery and food retail market in the regions of Mexico by distribution channel and type of store

Abstract

This paper analyzes the concentration level in Mexico's grocery and food retail market at the regional level, using alternative approaches. Having knowledge of the concentration index is essential because it quantifies how market share is distributed among firms, highlighting potential dominance that can influence prices and supplier negotiations. By leveraging employment and location data from these businesses we estimate concentration indices for this market across Mexico's regions. The results indicate that, in northern Mexico, a smaller percentage of the population lives in municipalities with high market concentration in self-service stores and express warehouses compared to other regions. Nevertheless, high market concentration (those above 1800 in the Herfindahl Hirschman index) in both types of stores is observed across all regions. In the convenience store segment, the southern region shows the highest proportion of people living in municipalities with low levels of concentration compared to other regions. We compare the results with satellite images, which show consistent findings for self-service stores.