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The impact of retail format diversification on retailers’ financial performance

Author

Listed:
  • Yuying Shi

    (Texas A & M University-Commerce)

  • Jeremy M. Lim

    (University of Florida)

  • Barton A. Weitz

    (University of Florida)

  • Stephen L. France

    (Mississippi State University)

Abstract

For retailers, format portfolio management is a core marketing operation, but has received little attention in the marketing literature. This study analyzes the relationship between format diversification and retailer performance in a global setting, where retailers as part of their geographic expansion process often employ format diversification. The dual strategies of geographic diversification and format diversification substantially complicate the diversification-performance relationship. Using a six year panel data set for leading global retailers, we find a positive impact for geographic diversification, a negative impact for format diversification and a negative interaction for the dual strategies, supporting a single focus diversification strategy. We further show the consistency of our findings using a series of model robustness checks.

Suggested Citation

  • Yuying Shi & Jeremy M. Lim & Barton A. Weitz & Stephen L. France, 2018. "The impact of retail format diversification on retailers’ financial performance," Journal of the Academy of Marketing Science, Springer, vol. 46(1), pages 147-167, January.
    • Handle: RePEc:spr:joamsc:v:46:y:2018:i:1:d:10.1007_s11747-017-0559-0
    DOI: 10.1007/s11747-017-0559-0
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