Evaluating Labor Productivity in Food Retailing
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Competition from new store formats including supercenters, warehouse clubs, and mass merchandisers
has emerged as a major threat to traditional grocery chains. A primary objective of
this paper is to understand how the store-level performance is related to the workforce composition
of full-time and part-time employees chosen by the food retailer along with benefits
and incentives provided to employees. The elasticity of complementarity for food retailers
measures how changes in store size affect use of full-time and part-time employees. Larger
store size increases the marginal value of labor, and firm hiring decisions shift to expanded
use of part-time employees.