Rebutting slacktivists with basic competition theory
Great article, Addison. I learned a lot. I only had to Google one word, and that was Jarritos. :)
"The answer is someone would soon make their own store."
I know this isn't the subject of the post, but I am honestly curious if you know anything about how responsive the grocery store market place is or can be in urban areas. It seems like suburban areas respond to profit opportunities by building sprawling stores in empty areas. That's obviously not an option downtown--so how much do incumbent stores face real competition?
This reminds me of my friend who used to live in Texas and work in retail telling me about H.E.B. grocery stores, and how they own 75% of the market in their region by ruthlessly undercutting any incoming competitors. Anytime a competitor opens a store, they slash their prices and take huge losses on milk until the competitor folds and leaves town. It sounds like they don't exercise their monopolistic control to gauge their consumers during normal times, but it was interesting to hear about how these situations might play out in real life.