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The effect of price and assortment of local products on store performance: An agent‐based modelling approach
Journal of Agricultural Economics ( IF 3.4 ) Pub Date : 2024-07-10 , DOI: 10.1111/1477-9552.12612
Houtian Ge 1 , Miguel I. Gómez 1 , Timothy J. Richards 2
Affiliation  

Retail distribution is essential for the growth of markets for local food. While online direct‐to‐consumer and local food hubs are becoming more sophisticated, the largest market for local foods remains the traditional intermediation (retailing) sector. We develop an agent‐based model to simulate the expansion, growth and profitability of retailers offering local foods across a landscape populated by consumers and competing retailers. We design a series of experiments to examine how changes in prices and assortment that include local and non‐local options in the fresh produce category impact store market share and profitability. We validate the model, and conduct our experiments, using household fresh produce expenditures data from a retail food‐delivery business in the Mid‐Atlantic region of the US. We find that retailers offering a larger assortment of local foods are able to sustain higher basket‐average retail prices and exhibit higher long‐run profits in comparison to retailers that do not carry local options. These results underscore the importance of local foods in a food retailer's price and assortment strategy. The key implication is that retailers need to be conscious not only of the breadth but also of the quality of their assortment in their pricing strategies.

中文翻译:


本地产品的价格和品种对商店绩效的影响:基于代理的建模方法



零售分销对于当地食品市场的增长至关重要。虽然在线直接面向消费者和当地食品中心变得越来越复杂,但当地食品的最大市场仍然是传统的中介(零售)部门。我们开发了一个基于代理的模型来模拟在消费者和竞争零售商聚集的地区提供本地食品的零售商的扩张、增长和盈利能力。我们设计了一系列实验来研究价格和品种(包括新鲜农产品类别中的本地和非本地选项)的变化如何影响商店的市场份额和盈利能力。我们验证了模型,并使用来自美国大西洋中部地区一家零售食品配送企业的家庭生鲜农产品支出数据进行了实验。我们发现,与不提供本地食品的零售商相比,提供更多种类本地食品的零售商能够维持更高的篮子平均零售价格,并表现出更高的长期利润。这些结果强调了当地食品在食品零售商的价格和品种策略中的重要性。关键的含义是,零售商在定价策略中不仅需要意识到其产品种类的广度,而且还需要意识到其质量。
更新日期:2024-07-10
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