Retail success The impact of space and agglomeration

Sammanfattning: This licentiate thesis provides an economic analysis of the retail sector, focusing on the factors influencing sales and thus the retail performance of regions and shopping centers. The two essays presented in this thesis can be read independently of each other, but both rest on the theoretical framework of agglomeration economies in addition to consumer demand and supply theory.Chapter one deals with a theoretical exploration of these issues and presents an overview of the retail industry, specifically from a Swedish point of view.The second chapter, “Determinants of Regional Retail Performance”, analyses which factors influence the level of retail sales, within both durables and non-durables, in Swedish regions over a seven-year period. The study shows that agglomeration and retail diversity are influential factors when explaining why some regions perform better than others in terms of retail turnover.The last chapter, “External versus internal shopping center characteristics – which is more important?”, investigates whether external or internal factors explain the performance of shopping centers. The results capture a higher overall effect from the internal factors, especially the tenant mix. However, agglomeration economies also play a role in explaining center performance. In both chapters, novel and detailed data over a whole country, in this case Sweden, are used. To sum up, the empirical results show that the success factor at a regional or a shopping center level in terms of boosting retail sales depends on the regional market size. However, even more important is the amount of product diversity available to the consumer, either at the regional or the shopping center level. This is also a feature that policy makers as well as center management can influence, as oppose to regional size, which must be seen as a more fixed or consistent factor.