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The Ongoing Evolution of US Retail: A Format Tug-of-War


  • Ali Hortaçsu
  • Chad Syverson


We review major changes in the economics of the US retail sector over the past 15-20 years and discuss what these portend for the future evolution of retail. The sector has been shrinking in relative size over the long term, though this stopped around the onset of the Great Recession. Retail has experienced stronger-than-average productivity growth that has not been accompanied by commensurate wage growth. The main forces shaping the retail landscape in recent decades have been the expansions of two formats: e-commerce and warehouse clubs. While both formats have been the subject of study and discussion, we find evidence that warehouse clubs have had to this point a greater effect on retail than e-commerce has. This impact has been manifested in changes in the retail sector’s scale, concentration, dynamism, and urbanization. Thus while e-commerce will continue to expand and physical retail will further evolve in the coming years, the physical format is unlikely to meet its demise soon.

Suggested Citation

  • Ali Hortaçsu & Chad Syverson, 2015. "The Ongoing Evolution of US Retail: A Format Tug-of-War," NBER Working Papers 21464, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21464
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    References listed on IDEAS

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    Cited by:

    1. D. Roderick Kiewiet, 2016. "What’s Right, and What’s Wrong, with “What is Wrong with the West’s Economies?” by Edmund Phelps," Homo Oeconomicus: Journal of Behavioral and Institutional Economics, Springer, vol. 33(1), pages 11-18, August.
    2. Peter Mayerhofer & Peter Huber & Dieter Pennerstorfer, 2017. "Handel und Einzelhandel im Wiener Beschäftigungssystem. Arbeitsmarktrelevanz, Arbeitsplatzcharakteristika, absehbare Herausforderungen," WIFO Studies, WIFO, number 61951, February.
    3. Alain Cohn & Tobias Gesche & Michel André Maréchal, 2018. "Honesty in the Digital Age," CESifo Working Paper Series 6996, CESifo Group Munich.
    4. Guido Friebel & Matthias Heinz & Miriam Krueger & Nikolay Zubanov, 2017. "Team Incentives and Performance: Evidence from a Retail Chain," American Economic Review, American Economic Association, vol. 107(8), pages 2168-2203, August.
    5. Chad Syverson, 2019. "Macroeconomics and Market Power: Context, Implications, and Open Questions," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 23-43, Summer.
    6. Sumit Agarwal & J. Bradford Jensen & Ferdinando Monte, 2017. "The Geography of Consumption," Working Papers 2017-062, Human Capital and Economic Opportunity Working Group.
    7. Shoag, Daniel & Tuttle, Cody & Veuger, Stan, 2017. "Rules versus Home Rule: Local Government Responses to Negative Revenue Shocks," Working Paper Series rwp17-037, Harvard University, John F. Kennedy School of Government.
    8. Erik Brynjolfsson & Daniel Rock & Chad Syverson, 2018. "Artificial Intelligence and the Modern Productivity Paradox: A Clash of Expectations and Statistics," NBER Chapters, in: The Economics of Artificial Intelligence: An Agenda, pages 23-57, National Bureau of Economic Research, Inc.
    9. Aleksandr Victorovich Sigarev & Mikhail Evgenievich Kosov & Olga Borisovna Buzdalina & Roman Alexeevich Alandarov & Inna Nikolaevna Rykova, 2018. "The Role of Chains in the Russian Retail Sector," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 542-554.
    10. Robert J. GORDON, 2015. "Secular Stagnation on the Supply Side: U.S. Producivity Growth in the Long Run," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(100), pages 19-45, 4th quart.
    11. Sumit Agarwal & J. Bradford Jensen & Ferdinando Monte, 2017. "Consumer Mobility and the Local Structure of Consumption Industries," NBER Working Papers 23616, National Bureau of Economic Research, Inc.
    12. Patel, Pankaj C. & Guedes, Maria João & Pearce, John A., 2017. "The Role of Service Operations Management in New Retail Venture Survival," Journal of Retailing, Elsevier, vol. 93(2), pages 241-251.
    13. Patel, Pankaj C. & Pearce, John A., 2018. "The survival consequences of intellectual property for retail ventures," Journal of Retailing and Consumer Services, Elsevier, vol. 43(C), pages 77-84.
    14. Sreten Ćuzović & Svetlana Sokolov Mladenović & Djordje Ćuzović, 2017. "The Impact of Retail Formats on the Development of Food Retailing," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship of the Faculty of Economics and International Relations at the Cracow University of Economics., vol. 5(1), pages 11-26.
    15. Bronnenberg, Bart, 2018. "Innovation and Distribution: A General Equilibrium Model of Manufacturing and Retailing," CEPR Discussion Papers 13058, C.E.P.R. Discussion Papers.

    More about this item

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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