Competition, Risk and Return in the US Grocery Industry

Q4 Business, Management and Accounting

Review of Marketing Science Pub Date : 2010-06-03 DOI:10.2202/1546-5616.1095

M. Corstjens, Ludo Vanderheyden

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Abstract

This paper studies competition and financial market performance of the US grocery sector over a period of almost 50 years (1960-2007), using the Sharpe-Fama-French-Carhart standard performance attribution methodology. Following Hou and Robinson (2006), investors in industries with strong (resp. weak) competitive pressures demand a positive (resp. negative) return premium commensurate with the competitive risk incurred. We examine whether such a Hou-Robinson premium exists in the US grocery sector.We find no statistical evidence of a Hou-Robinson premium for the sector as a whole. The sector thus appears to be correctly priced. When, however, our sample is separated into larger and smaller firms, the portfolio of larger firms exhibits a positive Hou-Robinson premium, while that of smaller firms exhibits a negative premium. This result supports the dual nature of competition in the US grocery sector.Furthermore, when we compare the risk-adjusted average return of the larger retail firms in the grocery portfolio with that of the larger manufacturing firms in the same portfolio, we find no statistically significant difference. The larger manufacturing and retail firms in the grocery supply chain seem to share the same level of competitive risk. However, the portfolio of smaller manufacturing firms does not exhibit the negative premium seen in the portfolio of smaller retail firms, indicating that the latter are able to shield themselves from competitive pressures in a way that their manufacturing counterparts are not.

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美国食品杂货行业的竞争、风险与回报

本文使用Sharpe-Fama-French-Carhart标准绩效归因方法，研究了近50年(1960-2007)期间美国杂货行业的竞争和金融市场绩效。继Hou和Robinson(2006)之后，投资者在具有较强(尊重)的行业中。微弱的竞争压力需要积极的应对。负)回报溢价与所产生的竞争风险相称。我们研究了美国食品杂货行业是否存在这样的侯-罗宾逊溢价。我们没有发现统计证据表明整个行业存在侯-罗宾逊溢价。因此，该板块的定价似乎是正确的。然而，当我们的样本被分为大公司和小公司时，大公司的投资组合表现出正的侯-罗宾逊溢价，而小公司的投资组合表现出负溢价。这一结果支持了美国食品杂货行业竞争的双重性质。此外，当我们比较食品杂货投资组合中较大的零售公司与相同投资组合中较大的制造公司的风险调整后的平均回报时，我们发现没有统计学上的显著差异。在食品杂货供应链中，较大的制造和零售公司似乎分担着同样水平的竞争风险。然而，小型制造公司的投资组合并没有表现出小型零售公司投资组合中的负溢价，这表明后者能够保护自己免受竞争压力的影响，而他们的制造业对手却没有。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of Marketing Science Business, Management and Accounting-Marketing

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The Review of Marketing Science (ROMS) is a peer-reviewed electronic-only journal whose mission is twofold: wide and rapid dissemination of the latest research in marketing, and one-stop review of important marketing research across the field, past and present. Unlike most marketing journals, ROMS is able to publish peer-reviewed articles immediately thanks to its electronic format. Electronic publication is designed to ensure speedy publication. It works in a very novel and simple way. An issue of ROMS opens and then closes after a year. All papers accepted during the year are part of the issue, and appear as soon as they are accepted. Combined with the rapid peer review process, this makes for quick dissemination.