Consumer shopping and spending across retail formats

We present an empirical study of household shopping and packaged goods spending across retail formats - grocery stores, mass merchandisers, and drug stores. Our study assesses competition between formats and explores how retailers' assortment, pricing, and promotional policies, as well as household demographics, 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 merchandisers also shop more in all other formats, suggesting that visits to mass merchandisers do not substitute for trips to the grocery store.