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Supercenters, Unionized Labor, and Performance in Food Retail

Authors

  • Richard Volpe


  • The author's affiliation is USDA-ERS, Washington, DC. Email: rvolpe@ers.usda.gov. The views expressed in this paper are those of the author and may not be attributed to USDA or ERS. The author is grateful to Timothy Park, Laurian Unnevehr, Robert King, Tim Beatty, Henry An, Sharon Shewmake, Conner Mullally, Christian Rojas, and Sandeep Mohapatra for advice and assistance with this manuscript. The author also thanks the attendees of the 2012 IIOC Conference in Arlington, VA, for a number of helpful questions and comments. Finally, the editor and three anonymous referees provided many suggestions that improved this manuscript tremendously.

Abstract

This study examines the impact of unionized labor on supermarket performance, as measured by profit and sales, accounting for the competitive presence of supercenters. The results confirm prior research that shows that supercenters have negative effects on supermarket performance. Unionized supermarkets generally outperform nonunionized supermarkets. However this effect disappears when accounting for supercenters, largely because unionized stores are less likely to compete with supercenters. I find no evidence for a significant union effect on supermarket performance. The deleterious effects of supercenters are stronger for unionized stores. Unionized supermarkets utilize less full-time labor and more labor-saving technology than do nonunionized ones.

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