Retail Location

University dissertation from Jönköping : Jönköping International Business School

Abstract: The thesis in hand presents four individual chapters, all of which explore the spatial aspects of the retail sector. The theoretical framework used in all four papers is vastly rooted in the urban and regional economics literature. Using novel data from Sweden for the application of various econometric methods, the thesis investigates (i) the distance sensitivity of demand and market reach for various types of retail activities, (ii) the spatial composition of retail markets and co-location patterns between the various branches of the sector, (iii) the spatial determinants of independent retailers’ productivity, and (iv) the relationship between the retail sector and place attractiveness.The first paper (co-authored with Johan Klaesson) establishes a methodological framework for estimating distance decay and market accessibility for various types of retail activities given a lack of consumer data. The paper addresses the heterogeneous nature of the sector and provides a solid categorization for various types of retail activities. The second paper (coauthored with Johan P. Larsson) employs a unique empirical approach to characterize the location and co-location of retailers in the metropolitan markets. The analysis captures the co-location tendencies between various types of retailers at a highly disaggregated  geographical level, where the importance of access to demand in the pertinent urban landscape is also accentuated.In the third paper, I investigate the spatial determinants of retail productivity. The focus of the paper is on the influence of market size and regional hierarchy on the productivity of independent retailers. The results show a higher productivity premium from the immediate market potential for stores located in central markets compared to stores located in non-central markets. On the other hand, regional market potential is found to play an equally important role for the productivity of stores located both in central and non-central markets. In the fourth paper, I address the role of retail as an urban amenity. In the empirical analysis, to capture the relevance of consumption possibilities for place attractiveness, “access to stores” measures are constructed for both the municipal and regional levels. Although consumption possibilities in the region are found to be positively associated with the place attractiveness of both rural and city municipalities, store access in municipal market boundaries is found to be relevant only for the place attractiveness of city municipalities.