| You are basing your arguments on a view of market power that has never existed in the U.S. That's not an acceptable use of market power. It specifically disadvantages small businesses that do not have access to private label brands. Small retailers can also have private label brands. Many do. There are a great many suppliers, large and small, to service all retail market niches. Gelson's, for example, is a CA grocery chain with 27 stores. It has its own store brand. Most small stores and chains don't have store brand products simply because it's not worth the costs. With a store brand, the store is on the hook for all marketing spend, and that's in addition to the money they spend on the inventory itself, which generally isn't materially cheaper than brand name products purchased at wholesale. And customers don't go to a store for the store brand products (Costco aside), they go for the name brand products like Coke and Nabisco. Do you honestly believe companies spend billions on marketing for nothing? Employer healthcare also creates an anti-competitive advantage for larger companies for the same reason, but that's a separate issue. Employer healthcare is a product of the world war ii wage controls that has survived due to favorable tax treatment. Small companies can also offer health care, and many do without issue. That means diminishing chain retailers and giving more agency to individual retailers. Do you know why chain stores are successful? It's because their market power allows them to acquire products cheaper from suppliers, which lets them sell those products for cheaper than smaller stores. Lower costs = lower prices = customers benefit. It's silly to say that we need the small store to survive if it sells product X for more than the chain store without offering any other benefit than merely providing the product. Small/indie stores have survived in the markets where factors other than pricing drive customer purchasing decisions, such as apparel, recreational outdoor equipment, restaurants, etc. |
Which is exactly why we have laws on the books from the era when my theory of market power never existed.
Low price = customer benefit isn’t written in stone, except on Robert Bork’s grave.
Customers benefit from a fair distribution of economic activity also, it’s just harder to quantify. Unfortunately some unscrupulous economists have used that fact to push pro-concentration policies.