Episode Details

Sysco is planning to buy Jetro Restaurant Depot. But this is not a normal horizontal merger. Sysco delivers food to restaurants, mainly. Restaurant Depot operates cash-and-carry warehouse-based stores. Those channels may serve very different needs for large restaurant chains.

Both, however, could be good choices for small, independent restaurants. That raises a simple antitrust question: do the two channels actually check each other? Maybe the answer lies in Sysco’s own experiment in Houston. Prior to the Jetro acquisition, Sysco had opened cash-and-carry stores called Sysco To Go to serve smaller foodservice customers.

If Restaurant Depot were to respond to that, it would create competition in cash-and-carry. If the prices Sysco delivered also moved, then it would indicate competition across channels. In this episode, we consider why restaurant size, local competition, and Sysco’s experiment in Houston may be more important than national market shares in understanding the proposed merger.

Read the full article and graphic analysis: https://blog.econworks.com/p/when-delivery-meets-cash-and-carry?r=562wri

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