BARRIER AND QUEUE EFFECTS - A STUDY OF LEADING US SUPERMARKET CHAIN ENTRY PATTERNS

De novo entry into local markets by the top twenty US supermarket chains is examined using logit analysis. We find that entry is related to potential entrants' proximity to the local market, market growth, concentration, the number of large chains that are incumbents in the local market, and the competency of potential entrants as measured by their recent return on equity. With regard to competing theories that relate strategic entry barriers to entry patterns, different components of the analysis provide support for different hypotheses. However, the most general model provides little support for the contestability or Chicago efficiency rent hypotheses.