One size fits all? The value of standardized retail chains Academic Article uri icon

abstract

  • AbstractMultioutlet firms, or chains, account for most US retail spending. This article quantifies the welfare and profit effects of standardized chains in the restaurant industry: chains face higher demand than independents, but are less flexible in customizing product selection or prices across locations. I find that on average chains could earn 19% higher variable profits if they could customize their product optimally, but they would lose 28% of their variable profits if they were to lose their demand advantages. Local policies that ban chains would decrease consumer welfare by 1.5% to 5.4% of restaurant spending and disproportionately impact lower incomeconsumers.

published proceedings

  • The RAND Journal of Economics

altmetric score

  • 3.2

author list (cited authors)

  • Klopack, B.

citation count

  • 1

complete list of authors

  • Klopack, Ben

publication date

  • March 2024

publisher