The dynamics of entry,exit and profitability: An error correction approach for the retail industry

We develop a two equation error correction model to investigate determinants of and dynamic interaction between changes in profits and number of firms in retailing. An explicit distinction is made between the effects of actual competition among incumbants, new firms competition and potential competition from firms outside the market. Effects of cost, demand and general income changes on profitability are investigated to gain insight in the role of retailing in the cost, demand and wage inflationary processes. The relative importance of profitability, growth and unemployment as determinants of net entry are studied. The model is tested using a panel data set of 36 Dutch shoptypes covering the 1977–1988 period.     

World consumer lifestyles databook

A case is made that the adoption of IT in European retailing is inhearntly conservative and is not characterized by the rapid revolutionary change sometimes argued to be the case. Reasons are suggested for the slow rate of integration of IT into retail management process and the limited range of applications in use operationally. These reasons are considered as within the nature of IT and within the culture of retailing. The impact of IT in retailing is considered in respect of cost reduction, improved asset productivity, changing internal relationships and the changing external relationships of retailers. Some areas of potential research are listed.     

零售业内资企业可持续发展研究

本文认为,在当地居民消费需求强劲增长和外资零售企业刚刚进入的背景下,近年来广州零售业内资企业获得了不同程度的发展。广州零售业内资企业具有接近市场和经营灵活等优势,但在经营理念、技术条件、规模和人力资源等方面同外资企业相比还存在许多不足。文章提出,内资企业要实现可持续发展,必须在经营理念和经营技术上持续创新,发展连锁经营,扩大规模;重新进行市场定位,创新经营特色,实施差异化经营;吸收先进技术,持续创新,加强供应链管理。     

Retailing and the period leading up to the Great Recession: a model and a 25-year financial ratio analysis of US retailing

Today, more than ever, retailers need to analyze the key solvency (liquidity) and efficiency financial ratio measures that affect how well their firms perform and to engage in long-term activities that will lead to improved results. Clearly, the recent ‘Great Recession’ has had a significant negative impact on retailers worldwide. Yet, an important question remains largely answered: Was the retail industry a major contributor to the events leading up to the economic crisis or was it an affected bystander shaken by the recession? This paper addresses the question for US retailing, the largest retail economy in the world. Although there has been considerable research on some aspects of the performance of the industry and individual firms, no prior studies exist that comprehensively examine the financial ratio performance of the totality of US retailing over time. Here, the financial performance of US retailers in 54 different sectors is analyzed for the 1982–2007 period using a model and data derived from Dun & Bradstreet's annual Industry Norms & Key Business Ratios. Results show that for many financial measures – such as the current ratio, liabilities to net worth, return on sales (profit margin), return on assets, financial leverage, and return on net worth – US retailing's financial performance has been in a steady decline for decades. The model introduced here is largely validated.     

零售企业扩张实践质疑威廉姆森命题

"复制和选择性干预不可能",是威廉姆森关于企业规模边界的一个颇具权威性的命题,但是本文认为,这个命题已遭到零售企业扩张实践的质疑,沃尔玛、家乐福等零售企业的扩张恰恰是由"复制和选择性干预"所支撑的.本文从零售企业"类似性活动"业务属性和"订购性生产"经营特征分析切入,对零售企业扩张中"复制和选择性干预"成为可能的深层原因进行了探讨.最后,文章认为,威廉姆森命题的遭遇与经济学的某种局限有关,这种局限的直接表现是经济学一直都将企业默认为生产企业,忽略流通企业的特殊属性,"工商合一"、"以工代商".文章对这种表象背后的原因也作了一定的分析.     

The impact of adopting customization policy and sustainability for improving consumer service in a dual-channel retailing

In recent decades sustainability and dual-route retailing have been adopted by many big industries. Companies are now bound to maintain such strategies that fulfill the sustainable goals developed by the United Nations. Industries face a huge penalty if carbon emissions exceed a certain boundary. Moreover, factories should maintain sufficient flow in retail chains and product quality. This paper demonstrates 3-pillar sustainability in dual channel retailing, empowering firms to integrate the financial-economic pillar with the non-financial (environmental, social, and ethical) pillar. The core product is made available through the traditional channel and customized products are through online channels. The model is enabling the customers with customization provisions where they can influence the products. Thus, as a novel approach, the article incorporates a presumed threshold limit on the product's (standard and customized) selling price difference. Due to customization, a new product is developed which needs extensive quality checks. The study introduces an investment in checking the quality of the customized product which reduces the probability of customization defects exponentially. Additionally, current research adapts the carbon emission cost, penalties charged to a firm for overshooting the limit, and social costs in a smart supply chain. It also exemplifies that production is directly proportional to financial investments in meeting sustainability objectives. The numerical analysis reflects that as production increases, penalty costs decrease at a significant rate but after reaching optimal production penalty cost again starts to increase. It is observed that the downfall of penalty is 20% more for the single-channel than dual. Adaptation of the customization policy makes the retailing strategy more cost-effective. The model exemplifies that it is more economical to adopt dual-channel retailing compared to single-channel as there is approximately a 14.0625% reduction in total cost in dual-channel retailing. Moreover, an 80% improved quality is observed with a financial investment, which improves consumer satisfaction.     

THE PRICE COST MARGIN - INTERNAL RATE OF RETURN RELATION: A CONTRIBUTION TO AN ETERNAL DISPUTE

It is shown that under some homogeneity conditions, the price cost margin and the internal rate of return rank firms identically.     

Are there barriers to innovation in retailing?

Recent data from the Community Innovation Survey challenge some of the conventional arguments that retailing is inherently less innovative than other sectors within developed economies. According to the data, firms in the UK retail sector are now converging on the all-sector average. Drawing on qualitative research undertaken within retail firms, this article begins by examining some of the implications of this and the reasons why survey data may still underestimate the extent of innovation in the sector. One of the potential contributory factors to an increase in reported levels of innovation may be a reduction in barriers to innovation. In a new analysis of the data, the article explores the nature and incidence of such barriers in the UK. It judges that, although barriers were already perceived to be low, further reductions may have played a part in stimulating innovation. However, amongst other factors, it also notes that the sector still lacks any reliance upon universities and HEIs to assist with strategic innovation. The article further concludes that present economic conditions are likely to detrimentally affect a number of the cost and market factors, which are the most significant barriers to innovation in the sector.     

Leverage made at home: Investors' margin loan usage and firm leverage

The “homemade leverage” conjecture by Modigliani and Miller (1958) implies that firm leverage and investors' leverage are substitutes. Using the data of margin loans by Chinese stock investors, we find that investors take significantly fewer margin loans on a stock when the company announces new bank loans. This effect is entirely driven by investors' margin loan repayment upon announcements, and is stronger for firms with higher institutional ownership or lower leverage. The findings suggest that investors undo the change in firm leverage by adjusting margin loans usage, supporting the “homemade leverage” conjecture.     

Selection of workers and firm heterogeneity

A model based on differences between workers regarding their preferences for wage and leisure drives the heterogeneity of firms result. The more industrious workers are driven to small firms due to free riding in large firms. An industry consisting of small and large firms turns out to produce more output than an industry consisting of only large firms. Some comparative statics results are derived with respect to the size of large firms, the productivity difference between firms, and monitoring capabilities.     

Firm strategies in expanding and diversifying exports

This paper provides novel empirical evidence on the patterns and dynamics of exports by Irish firms over the past two decades from a highly detailed data set of export records at the firm‐product‐destination level. We identify patterns of export concentration and specialisation and how these evolved over time. Firms’ strategies for export growth along product and destination markets mixes are then examined and the contributions of intensive (average sales) and extensive (number of products or markets) margins to overall exports and to export growth are calculated. We find that most exporting firms are quite small, selling a few products to a small number of destinations while export values are dominated by a relatively small group of highly globalised large firms selling many products to many destinations. Continuing exporters frequently introduce new products, drop products and enter and exit markets. Export growth in the case of Irish‐owned exporters appears largely driven by the extensive margin of product and destination changes. However, the opposite pattern holds for foreign‐owned firms with growth mainly coming from the intensive margin.     

Managing Relationships With Customers And Suppliers: Law, Economics And Strategy

Vertical relationships – contracts or ownership and control, enable firms to exercise extensive control and influence over a supplier or retailer. Such vertical links can increase firms'competitiveness in a whole range of ways. Some of these – reducing costs through integrating processes or ensuring effective product retailing also serve the consumer interest. Others, preventing retailers from offering competing products, for example, don't; and this explains the suspicion with which such links are often viewed by the competition authorities. The consequence is that strategy for vertical relationships must encompass commercial, economic and legal dimensions. It is a key element in corporate strategy in many industries.     

Food Retailing and Supply Chain Linkages in the Russian Federation

Abstract

This paper focuses on the evolution of Russian food retailing and linkages between and among firms in the food supply chain. Intermediation theory is used to develop a conceptual framework. Intermediaries have played an important role throughout the Russian food supply chain fulfilling the function of matching sellers and buyers. Tighter vertical linkages between firms in the Russian food industry are becoming more prevalent, and the roles of intermediaries may be performed by agents acting on behalf of a vertically integrated principal. The food retailing sector in the Russian Federation is evolving to be a source of information from the consumer to upstream firms.     

Animating the big middle

A Consumer Culture Theory (CCT) perspective captures the motivating social and cultural contexts of retail patronage and purchase behaviors and the myriad motivating factors behind the retail purchase decision. A CCT perspective complements behavioral decision theory and social cognition research in retailing. For consumers, retailers represent a field in which operant resources interact. In these marketspaces, firms and consumers exert a mutual gravitational pull. Firms compete for a role in the culturally constituted projects that consumers pursue by offering certain resource combinations. A CCT-based approach to retailing strives to account for co-creation, namely, how consumers deploy their own cultural resources, aided by retailer-provided resources, to accomplish the pursuit of their personal identity and communal projects. The paper discusses strategic orientations for retail firms that spring from a resource view, four types of firm supplied operant resources, suggests some mechanisms through which consumers animate cultural resources and their motivations to do so, and offers suggestions for future research.     

Comparing trade areas of technology centres using ‘Geographical Information Systems’

Advances in geographical information systems have contributed to location and marketing design strategies on the part of retailers. The techniques used in this field are based on delimiting trade areas and spatial analysis. The same approach is applied in this study to technology centres, which are considered as suppliers of knowledge-intensive services to their associated firms. The research objective focuses on analysing the spatial distribution of firms associated with two technology centres from different sectors. The results indicate that firms associated with a technology centre present spatial patterns that are similar to those observed in retailing, while significant differences were also found between the two technology centres used for the study.     

Service innovativeness in retailing: Increasing the relative attractiveness during the COVID-19 pandemic

COVID-19 primarily spreads through close contact between humans and has affected retailing industries extremely hard. To manage the situation retailers have turned to service innovation to change their operations to make consumers feel safe while shopping. This research focuses on the role of service innovativeness in retailing firms during the COVID-19 pandemic through an empirical study of almost 6000 consumers of 28 retailing firms. The results suggested that retailers with high service innovativeness performed COVID-19 imposed innovations better to improve their relative attractiveness. For retailers with physical stores, changes to the servicescape and the offering were found to be the key antecedents of service innovativeness. The findings on COVID-19 imposed service innovations demonstrate the importance of service innovativeness in successfully changing retailing services to adjust to the restrictions from governments and safety needs of customers.     

Does Export Openness Increase Firm‐level Output Volatility?

There is a widespread concern that increased trade may lead to increased instability and thus risk at the firm level. Greater export openness can indeed affect firm‐level volatility by changing the exposure and the reaction of firms to macroeconomic developments. The net effect is ambiguous from a theoretical point of view. This paper provides firm‐level evidence on the link between openness and volatility. Using comprehensive data on more than 21,000 German manufacturing firms for the period 1980–2001, we analyse the evolution of firm‐level output volatility and the link between volatility and export openness. Our paper has three main findings. First, firm‐level output volatility is significantly higher than the level of aggregate volatility, but it displays similar patterns. Second, increased export openness lowers firm‐level output volatility. This effect is primarily driven by variations along the extensive margin, i.e. by the distinction between exporters and non‐exporters. Variations along the intensive margin, i.e. the volume of exports, tend to have a dampening impact on volatility as well. Third, small firms are more volatile than large firms.     

Retailing Innovations in a Globalizing Retail Market Environment

In recent years, the combination of economic growth and population growth in emerging markets and less developed markets has accelerated the progression of globalization of retailing and globalization by retailers. The challenges faced by global and globalizing retailers (retailers who currently have or intend to establish a market presence in mature markets, emerging markets and less developed markets) can be more daunting compared to those faced by firms in other industries such as automobiles, steel, and computers. Retailing innovations that are responsive to the characteristics of distinctive national markets and broader aggregations of markets such as mature, emerging and less developed markets are critical to the success of global and globalizing retailers. Against this backdrop, this paper focuses on retailing innovations in the context of a globalizing retailing environment. It attempts to shed insights into the characteristics of retailing innovations conducive to superior performance in distinctive national markets and across broader aggregations of markets. Towards this end, we first examine the environmental conditions of markets in different development stages, namely mature, emerging and less developed markets, and explore consumer based, industry based, and legal/regulatory based challenges faced by globalizing retailers in these markets. Second, we show how these challenges can be transformed into opportunities with retailing innovations. We conclude with a roadmap for future research and present propositions on future development with respect to retailing innovations in these markets.     

Moral Hazard,Agency Cost,and Firm Growth

We study how the agency cost implied by the moral hazard problem in a firm dynamics model affects the life cycle growth pattern of firms. In the early stage of a firm's growth, the agency cost restricts the firm's capital input and diminishes over time, so that the firm's growth is driven by efficiency improvements and an exogenous progress in productivity. In the long run, when the firm loses its potential to improve efficiency, growth is driven only by the progress in productivity. As a result of this growth mechanism, consistent with the data, the growth rate and its volatility, as well as Tobin's Q, decrease with age and size. Moreover, the cross‐sectional distributions of firm size and managerial compensation obey a power law, as they do in the data. In addition, the model provides novel implications for how the characteristics of the production technology and the preferences of the economic agents affect the growth pattern of firms, and these implications are potentially testable.     

Economic Success Factors in Spanish Small Retail Businesses. An Analysis Based on Sector-Relative Definitions

The purpose of this study was to carry out a sectorial analysis of the strategic profile of successful small businesses in Spanish retailing. First, a one-dimensional statistical formalisation of the concept of small business was proposed, based on yearly sales revenue and relative to the sector. Likewise, some statistical formalisations of the concept of economic success were proposed, based on profit margins and also relativised according to sector. Once a conceptual framework was established, a sectorial model of strategic characterisation of successful small retailing firms was developed. The results of applying these proposals to the Spanish retail industry confirmed the importance of a sectorial approach as opposed to an overall analysis. This revised version was published online in August 2006 with corrections to the Cover Date.