Prices and brand diversity in touristic areas supermarkets

Using a dataset of consumption patterns in the island of Gran Canaria collected by the authors, this paper attempts to quantify some non-positive effects of tourism on destinations retail markets for goods and services. In particular, we empirically prove, controlling by factors such as population, size of supermarkets or number of competitors, two main effects: first, that supermarkets located in touristic areas charge higher prices than those in non-touristic areas; and second, that brand diversity is lower in the same stores, particularly in the case of smaller ones. These results confirm that local population do not always benefit from living in a touristic city and possibly provide a more balanced view on the positive and negative sides of tourism.

► We compose a database of supermarkets in Gran Canaria.
► We analyse the effects of tourism on the destination retail markets.
► Price and brand equations are estimated using GIS techniques.
► Prices in touristic areas are higher than those in other areas.
► The number of brand varieties is lower than in non-touristic areas.