Skip to main content
Log in

Evaluating a supermarket relocation strategy using spatial competition analysis

  • Published:
The Annals of Regional Science Aims and scope Submit manuscript

Abstract

The purpose of this paper is to show, in the context of a specific labor relations case, that spatial competition analysis can help regulatory authorities evaluate a firm's location strategy. The case involves the relocation of a supermarket franchisee, and two alternative explanations for the move are advanced. In the first explanation, it is argued that the supermarket relocation can be a form of strategic behavior that provides the least costly way of circumventing an institutional constraint that would otherwise make it difficult to convert a store from union to nonunion status. The second explanation is that the move is motivated by competitive considerations, particularly the desire of the franchisor to save a failing franchisee by moving it, and so that a new franchise could be opened in the vacated store and compete more aggressively with a recent entrant. A locational investigation, in conjunction with a regression analysis of sales data, support the rejection of the second explanation.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. Arnold SJ, Oum TH, Tigert DJ (1983) Determinant attributes in retail patronage: seasonal, temporal, regional, and international comparisons. J Marketing Res 20:149–157

    Google Scholar 

  2. Brown RL, Durbin J, Evans JM (1975) Techniques for testing the constancy of regression relationships over time. J R Statist Soc B 37:149–163

    Google Scholar 

  3. Craig CS, Ghosh A, McLafferty S (1984) Models of the retail location process: a review. J Retailing 60:5–36

    Google Scholar 

  4. Eaton BC, Lipsey RG (1982) An economic theory of central places. Econ J 92:56–72

    Google Scholar 

  5. Gabszewicz JJ, Thisse J-F (1986) Spatial competition and the location of firms. In: Arnott R (ed) Location theory. Harwood Academic Publishers, Chur (Switzerland)

    Google Scholar 

  6. Harvey AC (1981) The econometric analysis of time series. Philip Allan, Oxford

    Google Scholar 

  7. Tigert DJ (1983) Pushing the hot buttons for a successful retailing strategy. In: Darden WR, Lusch RF (eds) Patronage behavior and retail management. North Holland, Amsterdam

    Google Scholar 

  8. West DS (1981) Testing for market preemption using sequential location data. Bell J Econ 12:129–143

    Google Scholar 

  9. West DS, Von Hohenbalken B (1984) Spatial predation in a Canadian retail oligopoly. J Reg Sci 24:415–429

    Google Scholar 

  10. West DS, Von Hohenbalken B, Kroner K (1985) Tests of intraurban central place theories. Econ J 95:101–117

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Additional information

The author would like to thank Brad Reid, Stuart Landon, Noxy Dastoor, Balder Von Hohenbalken, Dave Ryan, Greg Dow, Arnold Berry, David Batten, seminar participants at the University of British Columbia, and two anonymous referees for their many helpful suggestions. Financial support from the University of Alberta's Endowment Fund for the Future is gratefully acknowledged

Rights and permissions

Reprints and permissions

About this article

Cite this article

West, D.S. Evaluating a supermarket relocation strategy using spatial competition analysis. Ann Reg Sci 23, 137–154 (1989). https://doi.org/10.1007/BF01582003

Download citation

  • Received:

  • Accepted:

  • Issue Date:

  • DOI: https://doi.org/10.1007/BF01582003

Keywords

Navigation