Does Triple Jeopardy Exist for Retail Chains?

Professor Byron Sharp & Dr Erica Riebe
University of South Australia

Abstract

The famous ‘double jeopardy’ empirical generalisation has been well documented for many competitive choice situations, including store shopping. A third ‘disadvantage’ (hence triple jeopardy) has been proposed (Bhat and Fox, 1996; Uncles, 1995) that grocery chains with lower market share have fewer customers, who shop slightly less often, and who also spend less each visit. Unlike double jeopardy there is no theoretical explanation for why such a third jeopardy effect might occur. We examined panel data on grocery shopping in an Australasian region in the late 1990’s and found double, but no triple jeopardy. Differences between chains in terms of average spend per visit seem instead easily explained by idiosyncratic brand differences of average store size and pricing policy. The research has implications for how average spend per visit might be changed.


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