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Supersize It: The Growth of Retail Chains and the Rise of the "Big Box" Retail Format

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Author Info
Emek Basker
Shawn Klimek
Pham Hoang Van

Additional information is available for the following registered author(s):

Abstract

We offer a theory for the complementarity between the size of a retail chain and the scope of its business to explain the growth of general-merchandise firms and the expansion of the “superstore” format. The complementarity results from an interaction of the retailer’s economies of scale and consumer gains from “one-stop shopping.” We find support for our model in micro data from the Census of Retail Trade for 1977–2002. Retail chains with more stores carry more distinct product lines and as retail chains grow they add both stores and product lines. On average, we find that a chain adds one product line, such as shoes, computers, or jewelry, to an existing store with every new store it opens. For the average large chain, adding a new product line throughout the chain is correlated with adding 400 new stores, competing in over 8,000 new markets and increasing its competitive pressure in more than 10,000 additional markets.

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File URL: http://www.ces.census.gov/index.php/ces/cespapers?down_key=101830
File Format: application/pdf
File Function: First version, 2008
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Publisher Info
Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 08-23.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 41 pages
Date of creation: Aug 2008
Date of revision:
Handle: RePEc:cen:wpaper:08-23

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Web page: http://www.ces.census.gov

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Related research
Keywords: Retail; Chain; Big Box; Superstore; Economies of Scale; General Merchandise; One Stop Shopping;

Other versions of this item:

Find related papers by JEL classification:
L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Bliss, Christopher, 1988. "A Theory of Retail Pricing," Journal of Industrial Economics, Blackwell Publishing, vol. 36(4), pages 375-91, June. [Downloadable!] (restricted)
  2. Emek Basker, 2005. "Job Creation or Destruction? Labor Market Effects of Wal-Mart Expansion," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 174-183, 02. [Downloadable!] (restricted)
    Other versions:
  3. Bondonio, Daniele, 2002. "Evaluating the Employment Impact of Business Incentive Programs in EU Disadvantaged Areas. A case from Northern Italy," P.O.L.I.S. department's Working Papers 27, Department of Public Policy and Public Choice - POLIS. [Downloadable!]
  4. Thomas W. Ross, 1983. "Winners and Losers under the Robinson-Patman Act," University of Chicago - George G. Stigler Center for Study of Economy and State 30, Chicago - Center for Study of Economy and State.
    Other versions:
  5. Michael Noel & Emek Basker, 2007. "The Evolving Food Chain: Competitive Effects of Wal-Mart's Entry Into The Supermarket Industry," University of California at San Diego, Economics Working Paper Series 2007-03, Department of Economics, UC San Diego. [Downloadable!]
    Other versions:
  6. Lucia Foster & John Haltiwanger & C. J Krizan, 2006. "Market Selection, Reallocation, and Restructuring in the U.S. Retail Trade Sector in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 748-758, November. [Downloadable!] (restricted)
  7. Holmes, Thomas J, 2001. "Bar Codes Lead to Frequent Deliveries and Superstores," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 708-25, Winter.
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  8. Kyle Bagwell & Garey Ramey & Daniel F. Spulber, 1997. "Dynamic Retail Price and Investment Competition," RAND Journal of Economics, The RAND Corporation, vol. 28(2), pages 207-227, Summer. [Downloadable!] (restricted)
    Other versions:
  9. Mark Doms & Ron Jarmin & Shawn Klimek, 2004. "Information technology investment and firm performance in US retail trade," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 13(7), pages 595-613, October. [Downloadable!] (restricted)
  10. Jonathan Beck & Michal Grajek & Christian Wey, 2007. "Estimating Level Effects In Diffusion Of A New Technology: Barcode Scanning At The Checkout Counter," ESMT Research Working Papers ESMT-07-002, ESMT European School of Management and Technology. [Downloadable!]
  11. Emek Basker & Pham Hoang Van, 2007. "Wal-Mart as Catalyst to U.S.-China Trade," Working Papers 0710, Department of Economics, University of Missouri. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Haskel, Jonathan & Sadun, Raffaella, 2009. "Regulation and UK Retailing Productivity: Evidence from Micro Data," IZA Discussion Papers 4028, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. John C. Haltiwanger & Ron S. Jarmin & C. J. Krizan, 2009. "Mom-and-Pop Meet Big-Box: Complements or Substitutes?," NBER Working Papers 15348, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Emek Basker, 2008. "Does Wal-Mart Sell Inferior Goods?," Working Papers 0805, Department of Economics, University of Missouri. [Downloadable!]
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