Retail chains are observed in many industries. The question addressed here
is whether retail chains can exploit buyer power by excluding some brands.
In a theoretical model with two differentiated producers and a single retai
ler, we show that a retailer will require exclusivity (exclude a brand) if
the brands are sufficiently symmetric in demand potential. Exclusivity will
increase welfare if the excluded brand is a close substitute for the brand
carried by the retailer. Our theoretical results are also set in relation
to some findings from the Norwegian grocery industry.