Mergers and Acquisitions in Supermarkets
By Dr. Jim Simmons and Shizue Kamikihara
Food is one of the least glamorous sectors of retailing, in which well established giant firms wage endless battles for market share. Even the weapons they use are old-fashioned: logistics (fresher foods and cheaper), slogans ('Mostly because of the meat'), or brand management (President's Choice). The food sector has not witnessed dramatic innovations, takeovers, or the entry (or exit) of new firms. Nevertheless, over time, the gains and losses by various players accumulate to the point that the industry requires restructuring. In late 1998 it resulted in two major food chain mergers, directly affecting five of the eight largest firms. These strategic moves were also affected by the giant shadow of a still undeclared competitor: WalMart. This research bulleting maps out the spatial implications of these changes, and speculates about the future.