Supermarket Human Resource Practices and Competition from Mass Merchandisers

Abstract

The rise of supercenters and the entry of Wal-Mart into food retailing have dramatically altered the competitive environment in the industry. This paper explores the impact of such changes on the labor market practices of traditional food retailers. We use longitudinal data on workers and firms to construct new measures of compensation and employment, and examine how these measures evolve within and across firms in response to changes in product market competition. An additional feature of the analysis is to combine rich case study knowledge about the retail food industry with the new matched employer-employee data from the Census Bureau. We compare a set of human resource practices using measures based on the matched employer-employee data to an index based on survey data and case studies. The consistency between the two approaches suggests that the measures are capturing important differences in supermarket human resource practices and policies. Analysis of administrative data combined with case study observations strengthens our understanding of the diversity of human resource practices in the retail food industry.