The Effect of Geographic Definition on Market Share

Geographic market definition has become increasingly important in many industries. This is due not only to its managerial implications, but also because of its importance in antitrust policy. The effect of different geographic definitions on market share and the systematic differences among them is the major focus of this research. The analysis is conducted at the store-level on five geographic market definitions, in seventeen metropolitan areas, for two large retail grocery chains. Market share is measured on two dimensions. One measure is sales per week for each store. The second measure is square feet of selling area for each store. The sample consists of 11,420 supermarkets from the 1997 Trade Dimensions database.