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Rising Concentration of Household Shopping, Superstar Firms, and the Implications for Retail Markups

Author

Listed:
  • Justin H. Leung
  • Zhonglin Li

Abstract

This paper documents an increase in the concentration of household shopping in the United States retail sector from 2004 to 2019. Despite a growing number of stores, households visit fewer stores, do more one-stop shopping, and increasingly shop at different retailers from each other. We find that the increasing availability of superstar retailers, the rise in product variety within stores, and the rise of online shopping contribute to these trends. We explore how these trends are linked with rising retail markups. Our calibration suggests a 5–10 percentage point increase in aggregate retail markups during this period.

Suggested Citation

  • Justin H. Leung & Zhonglin Li, 2026. "Rising Concentration of Household Shopping, Superstar Firms, and the Implications for Retail Markups," American Economic Journal: Applied Economics, American Economic Association, vol. 18(1), pages 160-194, January.
    • Handle: RePEc:aea:aejapp:v:18:y:2026:i:1:p:160-94
    DOI: 10.1257/app.20240081
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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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