Supersize It: The Growth of Retail Chains and the Rise of the "Big Box" Retail FormatEmek Basker, Shawn D. Klimek () and Van Pham () Working Papers from U.S. Census Bureau, Center for Economic Studies Abstract: We offer a theory for the complementarity between the size of a retail chain and the scope of its business to explain the growth of general-merchandise firms and the expansion of the “superstore” format. The complementarity results from an interaction of the retailer’s economies of scale and consumer gains from “one-stop shopping.” We find support for our model in micro data from the Census of Retail Trade for 1977–2002. Retail chains with more stores carry more distinct product lines and as retail chains grow they add both stores and product lines. On average, we find that a chain adds one product line, such as shoes, computers, or jewelry, to an existing store with every new store it opens. For the average large chain, adding a new product line throughout the chain is correlated with adding 400 new stores, competing in over 8,000 new markets and increasing its competitive pressure in more than 10,000 additional markets. Keywords: Retail; Chain; Big Box; Superstore; Economies of Scale; General Merchandise; One Stop Shopping (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: http://EconPapers.repec.org/RePEc:cen:wpaper:08-23 Access Statistics for this paper More papers in Working Papers from U.S. Census Bureau, Center for Economic Studies |
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