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Retail productivity

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  • Rachel Griffith

    ()
    (Institute for Fiscal Studies and University of Manchester)

  • Heike Harmgart

    ()
    (Institute for Fiscal Studies)

Abstract

Recent attention has focused on the UK's productivity gap in the retail sector. Figure 1 shows an estimate of labour productivity in retail across countries, using output per hour worked. The UK lies well behind the US, France and Germany. Reynolds at al (2005) contribute to this debate by providing a discussion of the literature, along side interviews with several UK and US retail firms. The conclusions of their paper are that, while there are many measurement issues, most of the evidence points to the fact that, on average, productivity in this sector in the UK is low and has grown slowly over recent years when compared to the US. They rightly point out that a more thorough understanding of what drives productivity in the retail sector requires a better understanding of the 'complex mix of urban characteristics, consumer preferences and competitive rivalries'. In this article we discuss some of the main issues involved in the measurement of productivity in retail, how these problems can be tackled, and we consider the interpretation of these statistics. We then discuss new work using microdata on the UK supermarket industry and conclude with a short discussion of where future research needs to look to answer the important policy questions around why the UK's productivity performance remains low in this important sector.

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Bibliographic Info

Paper provided by Institute for Fiscal Studies in its series IFS Working Papers with number W05/07.

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Length: 10 pp.
Date of creation: Mar 2005
Date of revision:
Handle: RePEc:ifs:ifsewp:05/07

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  1. Howard Smith, 2004. "Supermarket Choice and Supermarket Competition in Market�Equilibrium," Review of Economic Studies, Wiley Blackwell, vol. 71(1), pages 235-263, 01.
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Cited by:
  1. Maican, Florin & Orth, Matilda, 2008. "Productivity Dynamics and the Role of “Big-Box” Entrants in Retailing," Working Papers in Economics 328, University of Gothenburg, Department of Economics.
  2. Raffaella Sadun, 2008. "Does Planning Regulation Protect Independent Retailers?," CEP Discussion Papers dp0888, Centre for Economic Performance, LSE.
  3. Paul Cheshire & Christian A. L. Hilber & Ioannis Kaplanis, 2013. "Land Use Regulation and Productivity - Land Matters: Evidence from a UK Supermarket Chain," SERC Discussion Papers 0138, Spatial Economics Research Centre, LSE.
  4. Jonathan Haskel & Raffaella Sadun, 2012. "Regulation and UK Retailing Productivity: Evidence from Microdata," Economica, London School of Economics and Political Science, vol. 79(315), pages 425-448, 07.
  5. Alan Hughes, 2007. "Innovation Policy as cargo cult: Myth and Reality in knowledge-led Productivity Growth," ESRC Centre for Business Research - Working Papers wp348, ESRC Centre for Business Research.
  6. Maican, Florin & Orth, ´Matilda, 2013. "Entry Regulations, Product Differentiation and Determinants of Market Structure," Working Paper Series 984, Research Institute of Industrial Economics.
  7. Fu, Xiaolan & Helmers, Christian & Zhang, Jing, 2012. "The two faces of foreign management capabilities: FDI and productive efficiency in the UK retail sector," International Business Review, Elsevier, vol. 21(1), pages 71-88.
  8. Maican, Florin & Orth, Matilda, 2012. "A Dynamic Analysis of Regulation and Productivity in Retail Trade," Working Paper Series 939, Research Institute of Industrial Economics, revised 12 Apr 2014.

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