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