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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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8534.

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Date of creation: Aug 2011
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Handle: RePEc:cpr:ceprdp:8534
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