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Retail Chain Expansion: The Early Years of McDonalds in Great Britain


  • Toivanen, Otto
  • Waterson, Michael


Understanding the development of chainstores is important given the large GDP share of services and the continuing importance of chains in bringing these services to market. Service chains provide a puzzle because they take a long time to develop even when there are obvious expansion opportunities. We study the spread of McDonalds in Britain. We find cannibalization on the demand side and economies of density both within and between markets on the cost side, and evidence of learning by doing at the firm level. Within-period diseconomies of scale at the firm level help explain the lengthy opening pattern.

Suggested Citation

  • Toivanen, Otto & Waterson, Michael, 2011. "Retail Chain Expansion: The Early Years of McDonalds in Great Britain," CEPR Discussion Papers 8534, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:8534

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    Blog mentions

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    1. Retail Chain Expansion: The Early Years of McDonalds in Great Britain
      by bbatiz in NEP-HIS blog on 2011-09-01 19:28:07


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    Cited by:

    1. Andrea Pozzi, 2011. "Who Is Hurt by E-Commerce? Crowding out and Business Stealing in Online Grocery," EIEF Working Papers Series 1114, Einaudi Institute for Economics and Finance (EIEF), revised Sep 2011.
    2. Nathan Yang, 2011. "An Empirical Model of Industry Dynamics with Common Uncertainty and Learning from the Actions of Competitors," Working Papers 11-16, NET Institute.

    More about this item


    Cost of entry; diffusion; economies of density; economies of scale; entry; expansion;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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