Information Costs and Information Asymmetry in British Food Retailing

Abstract

This article examines debates over the emergence of multiple retailers’ market power through the historical growth of relational contracting within British food retailing. The article documents the changing pattern of relational contracting. Contracting is suggested to adapt to changes in the importance of branded goods, own-label goods and asset specific investment in retailing outlets and logistics. In conclusion the article challenges the neo-classical view that markets are characterised by discrete classical contracting in favour of a view which emphasises firms’ risk minimising strategy based upon relational contracting and market power.