What factors are contributing to the rising costs at your local independent grocery store? The answer might not be “inflation,” but a quiet shift in how food gets to the shelf.
In this episode of EconWorks, we examine Mondelēz International’s decision to end Direct-Store-Delivery (DSD) for independent NYC grocers. We move past the logistics to analyze the competitive fallout:
The DSD Advantage: Why manufacturer-provided merchandising is a “hidden” subsidy for small retailers.
Marginal Cost Shifting: How moving to third-party wholesalers creates an unlevel playing field between local shops and big chains.
The Robinson–Patman Act: Why unequal access to logistics services might actually be a violation of federal antitrust law.
Visit this page for a detailed article and illustration of this case:
Distribution as Discrimination: How Supply Chain Decisions Can Raise Grocery Prices Without Changing Wholesale Prices
The competitive importance of vertical distribution arrangements has been a key focus in antitrust economics for many years. The majority of traditional research on the behavior of upstream firms has concentrated on the variations in wholesale prices among downstream purchasers. However, non-price inputs—such as delivery services, inventory management, and in-store merchandising—may play an equally important role in shaping competition among retailers by affecting their effective procurement costs.
#Antitrust #SupplyChain #NYC #Mondelez #RobinsonPatman #Economics #GroceryNews #EconWorks
