Abstract
As many firms adopt chain operations, it is worth investigating whether the operations are efficient enough to support the firm’s growth and if opening new retail outlets actually provides economies of scale. This study examines the effect of increasing the number of stores on retailers’ operational efficiency and tests the effect empirically. The number of stores is considered an important indicator affecting retail efficiency. However, previous studies have returned conflicting results and arguments about the impact of the number of stores on efficiency. A log-linear regression analysis reveals that while retailers gain advantages in terms of reduced purchasing costs, they increase the costs for store operations. This paper aims to contribute to the field by clarifying the impact of retailers’ growth on operational efficiency based on empirical research.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
References
Aoyama, Y. (2007). Oligopoly and the structural paradox of retail TNCs: An assessment of Carrefour and Wal-Mart in Japan. Journal of Economic Geography, 7(4), 471–490.
Assaf, G., Barros, C., & Sellers-rubio, R. (2011). Efficiency determinants in retail stores: A Bayesian framework. Omega, 39(3), 283–292.
Barros, C. P. (2006). Efficiency measurement among hypermarkets and supermarkets and the identification of the efficiency drivers: A case study. International Journal of Retail & Distribution Management, 34(2), 135–154.
Barros, C. P., & Alves, C. A. (2003). Hypermarket retail store efficiency in Portugal. International Journal of Retail & Distribution Management, 31(11), 549–560.
Bianchi, C. (2009). Retail internationalisation from emerging markets: Case study evidence from Chile. International Marketing Review, 26(2), 221–243.
Dawson, J. A. (2007). Scoping and conceptualising retailer internationalisation. Journal of Economic Geography, 7(4), 373–397.
Evans, J., Bridson, K., Byrom, J., & Medway, D. (2008). Revisiting retail internationalisation: Drivers, impediments and business strategy. International Journal of Retail & Distribution Management, 36(4), 260–280.
Ganeshan, R., Ring, L. J., & Strong, J. S. (2007). A mathematical approach to designing central vs. local ordering in retail. International Journal of Production Economics, 108(1–2), 341–348.
Goldman, A. (1991). Japan’s distribution system: Institutional structure, internal political economy, and modernization. Journal of Retailing, 67(2), 154–183.
Hanoch, G. (1975). The elasticity of scale and the shape of average costs. The American Economic Review, 65(3), 492–497.
Illueca, M., Pastor, J. M., & Tortosa-Ausina, E. (2009). The effects of geographic expansion on the productivity of Spanish savings banks. Journal of Productivity Analysis, 32(2), 119–143.
Ingene, C. (1982). Labor productivity in retailing. The Journal of Marketing, 46(4), 75–90.
Ingene, C. (1984). Scale economies in American retailing: A cross-industry comparison. Journal of Macromarketing, 4(2), 49–63.
Keh, H. T., & Chu, S. (2003). Retail productivity and scale economies at the firm level: A DEA approach. Omega, 31(2), 75–82.
Larke, R., & Causton, M. (2005). Japan: A modern retail superpower. New York: Palgrave Macmillan.
Mishra, A., & Ansari, J. (2013). A conceptual model for retail productivity. International Journal of Retail & Distribution Management, 41(5), 348–379.
Planet Retail. (2006). How Aldi works. Report, Planet Retail.
Reardon, J., Hasty, R., & Coe, B. (1996). The effect of information technology on productivity in retailing. Journal of Retailing, 72(4), 445–461.
Srinivasan, R., Sridhar, S., Narayanan, S., & Sihi, D. (2013). Effects of opening and closing stores on chain retailer performance. Journal of Retailing, 89(2), 126–139.
Uyar, A., Bayyurt, N., Dilber, M., & Karaca, V. (2013). Evaluating operational efficiency of a bookshop chain in Turkey and identifying efficiency drivers. International Journal of Retail & Distribution Management, 41(5), 331–347.
Walters, D., & White, D. (1987). Retail marketing management. London: Palgrave Macmillan.
White, H. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity. Econometrica, 48(4), 817–838.
Yu, W., & Ramanathan, R. (2008). An assessment of operational efficiencies in the UK retail sector. International Journal of Retail & Distribution Management, 36(11), 861–882.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2016 Academy of Marketing Science
About this paper
Cite this paper
Tagashira, T., Minami, C. (2016). Cost Efficiency of Multiple Store Retailers: A Comparison of Purchasing and Store Operation Costs. In: Kim, K. (eds) Celebrating America’s Pastimes: Baseball, Hot Dogs, Apple Pie and Marketing?. Developments in Marketing Science: Proceedings of the Academy of Marketing Science. Springer, Cham. https://doi.org/10.1007/978-3-319-26647-3_104
Download citation
DOI: https://doi.org/10.1007/978-3-319-26647-3_104
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-319-26646-6
Online ISBN: 978-3-319-26647-3
eBook Packages: Business and ManagementBusiness and Management (R0)