An Empirical Analysis of Retail Market Structure: Location, Competition, and Consumer Out-Shopping

In this dissertation, I examine the U.S. retail market structure (i.e., retail expenditure per household) across seven retail subsectors (i.e., nine lines of retail trade), using data of 735 metropolitan and micropolitan areas obtained from 2012 Economic Census and 2012 American Community Survey (5-year estimates). I have shown that consumers’ socioeconomic and demographic characteristics, two marketing mix variables (i.e., quantity and quality of service), intertype and intratype competition, and consumers’ out-of-town shopping behavior significantly influence retail expenditures across various lines of retail trade. Specifically, the two service variables significantly increase household expenditures at all nine lines of retail trade. Moreover, with adequate and dedicated service employees, retailers can mitigate the negative impact incurred from local competitors as well as competitors located in nearby areas. Also, I have shown that key variables driving retail expenditures are slightly different in metropolitan vs. micropolitan areas. More importantly, I have examined consumers’ out-of-town shopping behavior. Results indicate that consumers do out-of-town shopping for various lines of retail trade, including new cars, furniture, electronics and appliances, clothing, traditional department stores, discount department stores, and warehouse clubs and supercenters. This dissertation contributes to the marketing literature and provides insights to retailers on decisions about store location, store size, competition, market segmentation, and consumer out-shopping