John Gardner wrote:
> Supermarkets, at least in most of the US, would not be my choice
> as an examplar of  "free-market" economic dogma, unless the market
> referenced is the market in permits, licenses, variances, lawyering in
> general... And let's not forget baksheesh to un-elected "stakeholders"
> like Labor Unions and Environmental groups...

The supermarket industry is quite competitive in this area, at least that's
how it appears from the outside.  We have Market Basket, Stop and Shop, Star
Market, Hanniford, and Donelan's as chains I can think of off the top of my
head.  Then there are a number of smaller Quicky Mart style stores, some
chains, some individual.  They can't all be owned by the same people or be
in collusion with one another.

I don't know what the permitting issues are, but those must be roughly
similar for similar sized stores in similar locations.  In any case, once a
store has been built, these have little to do with what products it stocks.
A well run store will stock what will yield them the most profit, which is
presumably related to what the most customers want to buy.  Competition will
force the price down to a reasonable markup.  If Donelans charges $2.50 for
a can of soup and Market Basket $1.20 for the same can, a lot of people are
going to vote with their feet and shop at Market Basket.

As far as I can tell, the system is working.  Donelans does charge a lot
more for soup and other stuff.  While they continue to exist, they don't
seem to be growing, and don't seem to ever be too full.  Meanwhile it
appears to me there are more and more cars parked in front of Market Basket
every time I'm there, and there seem to be more people inside.  While I
don't know how profitable they are, they are clearly getting more volume
than the other stores because they are offering tradeoffs the buying public
prefers.  Maybe it's all a illusion, but they seem to be doing well and
opening new stores, while Donelans hasn't opened a new store in a long time.

So the system isn't perfect, but the feedback paths are there and mostly
seem to be working in the sense of tending towards reasonable efficiency on
its own with no Commissar of Food Products telling anyone what to stock.


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