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Retail rings of influence: Rethinking retail catchment analysis in the light of purchasing power

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  • Yiu, Chung Yim
  • Truong, Quan Le
  • Kou, Jiaying
  • Cheung, Ka Shing

Abstract

Catchment areas are vital indicators of purchasing power that significantly influence the retail sales of shopping malls. However, conventional models, typically provided by mall owners, often assume a fixed isochrone, neglecting the sensitivity of the catchment size on mall's positioning strategies and sizes. This study introduces a novel, flexible approach, leveraging the population and household incomes of administrative units as a proxy for purchasing power, thereby enabling a sensitivity analysis on adjustable catchment sizes. We develop a Python programme to geofence these units based on an adjustable isochrone radius. This pioneering research also applies principles from the species-energy relationship and niche specialisation theory to build a theoretical model of catchment areas, empirically testing it using Australian data. Our findings confirm that while purchasing power within varying catchment sizes exerts a positive influence on retail sales, the impact is less pronounced for larger malls due to their more generalised niche in attracting customers far away from the malls. This study sheds new light on the dynamic interplay between catchment area characteristics and mall performance, offering valuable insights for future research and retail strategy planning.

Suggested Citation

  • Yiu, Chung Yim & Truong, Quan Le & Kou, Jiaying & Cheung, Ka Shing, 2024. "Retail rings of influence: Rethinking retail catchment analysis in the light of purchasing power," Journal of Retailing and Consumer Services, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:joreco:v:76:y:2024:i:c:s0969698923003429
    DOI: 10.1016/j.jretconser.2023.103591
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