Understanding the Impact of Walmart Closure on Households' Demand for Consumer Packaged Goods Categories

The effects of Walmart closure on households’ demand for consumer-packaged goods categories are analysed. The investigation involves two stages. In the first stage, Walmart closure effects on household demand for these categories are estimated using a two-way linear fixed effects regression. In the second stage, the estimated Walmart closure effects are regressed on category characteristics using the weighted least squares regression. The empirical results indicate that Walmart closure tends to exert differential impacts on household volume purchase across consumer-packaged goods categories. These variations exist because categories differ in their types and the roles they play in retailers’ portfolios. After Walmart’s exit, consumers shop more at channels that have a stronger association with certain category types and roles, resulting in more purchases in these categories than others.