‘Checkout’: The Analysis of Oligopolistic Behaviour in the UK Grocery Retail Market

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Abstract
Industrial economics is particularly concerned with the relationships between market concentration, market behaviour, pricing and market performance. When, in June 1977, Tesco launched its ‘Operation Checkout’ so began one of the most intensely competitive periods of retailing history. Checkout, which was a wide price-cutting campaign backed up by extensive advertising, provides an ideal opportunity to examine the rivalry of leading grocery companies. This paper examines the events leading up to Checkout, during the initial campaign and after; it examines the possible causes of Checkout and whether it was successful. The paper asks whether the behaviour of firms surrounding Tesco can be considered to be oligopolistic and, if so, what this may mean for the future.

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