Game of Retailers

Abstract: This thesis investigates the relationship between access to external shopping centers and the scale of downtown retailing for Swedish municipalities. To do so we propose two competing scenarios for how such a relationship may be shaped. These scenarios are (i) that an external shopping center can attract the customers that otherwise would shop in the downtown district, or possibly (ii) that the availability of and access to external shopping centers can increase the attractiveness of a given local retail market overall. The question we pose is important to answer for retailers as well as for local policymakers, as it can influence their investment decisions. We use a measure of access to external shopping centers to account for the distance sensitivity, and the spatial continuum in the retailing industry. By using geo-coded data, we determine the total number of shops at the 5 and 1 kilometer distance from the central business district in Swedish municipalities. To establish the relationship between access to external shopping centers in a municipality and the scale of its retail market, we use cross-sectional data from 2013, and perform several OLS multiple regression analyses. We find a positive relationship between access to external shopping centers and the scale of the downtown retail district. The result holds for urban municipalities and for the accessibility measures on the regional and extra-regional level.