ABSTRACT
This chapter provides a broad overview of the food retail industry; and discusses more specifically food retail access and the economics of store location decisions. It also provides a broad overview of the restaurant industry and uses this industry as an example to introduce the economic concept of monopolistic competition. The chapter summarizes recent labor policy debates in the food retail and restaurant industries and describes the economics of food price indices and inflation measurement, which shed light on the role of prices in nutritionally relevant food-spending decisions. Economists have a well-developed theory of how consumer spending responds to income and prices. Economists have a systematic theory connecting rational consumer choices to three factors: prices, income and preferences. The federal government's Bureau of Labor Statistics uses a more elaborate version of approach to estimate price indices for many categories of consumer goods, including foods and beverages.
