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Location and co-location in retail: a probabilistic approach using geo-coded data for metropolitan retail markets

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  • Johan Larsson
  • Özge Öner

Abstract

In this paper, we employ geo-coded data at a fine spatial resolution for Sweden’s metropolitan areas to assess retail co-location. Retail clusters and their place in urban space are assessed from several angles. The probability of a specific type of retail unit to be established in a 250 by 250 m square is modelled as a function of (i) the presence of other similar retail establishments, (ii) the presence of stores that belong to other retail sectors and (iii) other characteristics of the square area, and its access to demand in the pertinent urban landscape. The analysis clarifies which types of retail clusters one can expect to find in a metropolitan region, as well as their relationship to the urban landscape. We analyse three distinct types of stores: clothing, household appliances, and specialized stores. Stores with high intensities of interaction are co-located, and predominantly located close to the urban cores, consistent with predictions from bid rent theory and central place theory. We further document negative location tendencies between shops that sell frequently purchased products and shops that sell durables. Moreover, our results highlight the importance of demand in the close surroundings, which is particularly strong for small-scale establishments. Copyright Springer-Verlag Berlin Heidelberg 2014

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  • Johan Larsson & Özge Öner, 2014. "Location and co-location in retail: a probabilistic approach using geo-coded data for metropolitan retail markets," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(2), pages 385-408, March.
    • Handle: RePEc:spr:anresc:v:52:y:2014:i:2:p:385-408
    DOI: 10.1007/s00168-014-0591-7
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    Cited by:

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    2. Nilsson, Helena, 2020. "IKEA entry - Effects on firms in retail and hospitality," HFI Working Papers 11, Institute of Retail Economics (Handelns Forskningsinstitut).
    3. Mingshu Wang, 2021. "Polycentric urban development and urban amenities: Evidence from Chinese cities," Environment and Planning B, , vol. 48(3), pages 400-416, March.
    4. Thomas Wieland, 2020. "REAT: A Regional Economic Analysis Toolbox for R," REGION, European Regional Science Association, vol. 7, pages 1-57.
    5. Eun Yeong Seong & Youngjae Lim & Chang Gyu Choi, 2022. "Why are convenience stores clustered? The reasons behind the clustering of similar shops and the effect of increased competition," Environment and Planning B, , vol. 49(3), pages 834-846, March.
    6. Klaesson, Johan & Nilsson, Helena, 2020. "Entry of malls and exit of stores - The role of distance and economic geography," HFI Working Papers 12, Institute of Retail Economics (Handelns Forskningsinstitut).
    7. Federico Pablo-Martí & Josep-Maria Arauzo-Carod, 2020. "Spatial distribution of economic activities: a network approach," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 15(2), pages 441-470, April.
    8. Magali Chaudey & Muriel Fadairo & Frédéric Perdreau, 2020. "Do retailers benefit from network affiliation in all locations," Economics Bulletin, AccessEcon, vol. 40(2), pages 1623-1633.
    9. Cristian Rizzo & Matteo Di Giuseppe & Domenico Moramarco & Simone Pizzi & Myriam Portaluri & Gianluigi Guido, 2016. "L?effetto dell?inquinamento acustico sulla distanza percepita dei punti vendita," ESPERIENZE D'IMPRESA, FrancoAngeli Editore, vol. 2016(1), pages 65-79.
    10. Öner, Özge, 2014. "Retail Productivity: Investigating the Influence of Market Size and Regional Hierarchy," Working Paper Series 1047, Research Institute of Industrial Economics.
    11. Nilsson, Pia, 2016. "The influence of related and unrelated industry diversity on retail firm failure," Journal of Retailing and Consumer Services, Elsevier, vol. 28(C), pages 219-227.
    12. Ke Ding & Toshitaka Gokan & Xiwei Zhu, 2017. "Small business and the self-organization of a marketplace," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(1), pages 1-19, January.
    13. Giulio Grossi & Marco Mariani & Alessandra Mattei & Patrizia Lattarulo & Ozge Oner, 2020. "Direct and spillover effects of a new tramway line on the commercial vitality of peripheral streets. A synthetic-control approach," Papers 2004.05027, arXiv.org, revised Nov 2023.

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    More about this item

    Keywords

    L81; R14; R10;
    All these keywords.

    JEL classification:

    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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