ABSTRACT
The limited orientation towards retailing may be the result of the considerable differences between retailing and manufacturing.2 Straightforward differences are product and market. The 'product' of retailing is a 'bundle of services' with several dimensions, such as price level, proximity, accessibility, assortment width and depth [Hall, Knapp and Winsten, 1961]. Retailing does not offer a clearly defined product. The market of retail services is inherently imperfectly competitive and in this market conditions of (spatial) oligopoly
may arise [Hall, 1949]. The lack of studies attempting to compare the retail price setting of dif-
ferent countries is even greater. We know of only two studies: Den Hertog, Potjes and Thurik [1994] and Nooteboom, Thurik and Vollebregt [1988].3 The lack of appropriate data usually hampers studies with an international dimension. Nooteboom, Thurik and Vollebregt [1988] deal, for instance, with only one year and a limited number of shop types. In the present study we shall try to fill the gap in studies of retail price setting from an international perspective by comparing the Dutch and German situation. For the two countries, data are used for the same period, 1981-86, and the same 21 shop types. The shop types cover almost completely the entire spectrum of shop types across retailing. This allows a comparison between the retail trade of the two countries as a whole.
