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

Author

Listed:
  • Emek Basker
  • Shawn Klimek
  • Pham Hoang Van

Abstract

This paper documents and explains the recent rise of "big-box" general merchandisers. Data from the Census of Retail Trade for 1977-2007 show that general-merchandise chains grew much faster than specialist retail chains, and that general merchandisers that added the most stores also made the biggest increases to their product offerings. We explain these facts with a stylized model in which a retailer’s scale economies interact with consumer gains from one-stop shopping to generate a complementarity between a retailer’s scale and scope.

Suggested Citation

  • Emek Basker & Shawn Klimek & Pham Hoang Van, 2008. "Supersize It: The Growth of Retail Chains and the Rise of the "Big Box" Retail Format," Working Papers 08-23r, Center for Economic Studies, U.S. Census Bureau, revised Sep 2011.
  • Handle: RePEc:cen:wpaper:08-23r
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    File URL: https://www2.census.gov/ces/wp/2008/CES-WP-08-23R.pdf
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    File URL: https://www2.census.gov/ces/wp/2008/CES-WP-08-23.pdf
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    References listed on IDEAS

    as
    1. Bliss, Christopher, 1988. "A Theory of Retail Pricing," Journal of Industrial Economics, Wiley Blackwell, vol. 36(4), pages 375-391, June.
    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, February.
    3. Emek Basker & Michael Noel, 2009. "The Evolving Food Chain: Competitive Effects of Wal-Mart's Entry into the Supermarket Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 977-1009, December.
    4. Holmes, Thomas J, 2001. "Bar Codes Lead to Frequent Deliveries and Superstores," RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 708-725, Winter.
    5. Roger Betancourt & David Gautschi, 1990. "Demand Complementarities, Household Production, and Retail Assortments," Marketing Science, INFORMS, vol. 9(2), pages 146-161.
    6. Mark Doms & Ron Jarmin & Shawn Klimek, 2004. "Information technology investment and firm performance in US retail trade," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 13(7), pages 595-613.
    7. Emek Basker & Pham Hoang Van, 2007. "Wal-Mart as Catalyst to U.S.-China Trade," Working Papers 0710, Department of Economics, University of Missouri.
    8. Roger R. Betancourt, 2004. "The Economics of Retailing and Distribution," Books, Edward Elgar Publishing, number 3511.
    9. 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.
    10. Ross, Thomas W, 1984. "Winners and Losers under the Robinson-Patman Act," Journal of Law and Economics, University of Chicago Press, vol. 27(2), pages 243-271, October.
    11. 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.
    12. Jonathan Beck & Michal Grajek & Christian Wey, 2011. "Estimating level effects in diffusion of a new technology: barcode scanning at the checkout counter," Applied Economics, Taylor & Francis Journals, vol. 43(14), pages 1737-1748.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Francine Lafontaine & Kathryn Shaw, 2016. "Serial Entrepreneurship: Learning by Doing?," Journal of Labor Economics, University of Chicago Press, vol. 34(S2), pages 217-254.
    2. Raffaella Sadun, 2015. "Does Planning Regulation Protect Independent Retailers?," The Review of Economics and Statistics, MIT Press, vol. 97(5), pages 983-1001, December.
    3. Brianna Cardiff-Hicks & Francine Lafontaine & Kathryn Shaw, 2015. "Do Large Modern Retailers Pay Premium Wages?," ILR Review, Cornell University, ILR School, vol. 68(3), pages 633-665, May.
    4. Emek Basker, 2012. "Raising the Barcode Scanner: Technology and Productivity in the Retail Sector," NBER Chapters,in: Standards, Patents and Innovations National Bureau of Economic Research, Inc.
    5. Maican, Florin & Orth, ´Matilda, 2013. "Entry Regulations, Product Differentiation and Determinants of Market Structure," Working Paper Series 984, Research Institute of Industrial Economics.
    6. Basker, Emek, 2011. "The Causes and Consequences of Wal-Mart’s Growth," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 110-134.
    7. John Haltiwanger & Ron Jarmin & C. J. Krizan, 2010. "Mom-and-Pop Meet Big Box: Complements or Substitutes?," NBER Chapters,in: Cities and Entrepreneurship National Bureau of Economic Research, Inc.
    8. 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, July.
    9. Jenny Schuetz & Jed Kolko & Rachel Meltzer, 2010. "Is the 'Shop Around the Corner' a Luxury or a Nuisance? The relationship between income and neighborhood retail patterns," Working Paper 8513, USC Lusk Center for Real Estate.
    10. Emek Basker, 2015. "Change at the Checkout: Tracing the Impact of a Process Innovation," Journal of Industrial Economics, Wiley Blackwell, vol. 63(2), pages 339-370, June.
    11. David Mills, 2013. "Countervailing Power and Chain Stores," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(3), pages 281-295, May.
    12. Emek Basker, 2011. "Does Wal‐Mart Sell Inferior Goods?," Economic Inquiry, Western Economic Association International, vol. 49(4), pages 973-981, October.

    More about this item

    Keywords

    Retail; chain; big box; superstore; economies of scale; general merchandise; one-stop shopping;

    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

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